The downtown Birmingham skyline is seen from Legion Field in Birmingham, Ala., Saturday, Oct. 5, 2013. (Mark Almondfirstname.lastname@example.org)
Homebuyers in the Birmingham metropolitan area need to make, at least, $41,717.33 a year to afford to purchase a median-price home, according to a new analysis from HSH.com.
Despite being one of the affordable metros in the U.S., homebuyers in the Birmingham metro saw an increase of more than $3,000 in the required salary during the second quarter of the year, the website stated. Home prices grew by 12.62 percent in a quarterly comparison.
If homebuyers put 10 percent down instead of 20 percent, the required salary increases to $48,645.87, according to HSH.com
The Birmingham metro still remains one of the 25 least expensive of the 50 largest metro areas in the country. The metro area includes: Bibb, Blount, Chilton, Jefferson, St. Clair, Shelby, and Walker counties.
The average mortgage rate in Birmingham metro is 4.11 percent. The median home price is $206,100, according to HSH.com. The averagely monthly payment is $973.40.
HSH.com is the nation’s largest publisher of mortgage and consumer loan information.
To come up with the average salary required to purchase a home, HSH.com calculates the annual before-tax income required to cover the mortgage’s principal, interest, property tax and homeowner’s insurance payment. HSH.com uses standard 28 percent “front-end” debt ratios and a 20 percent down payment subtracted from the median-home-price data to arrive at the figures.
Loans with less than a 20 percent down payment will incur mortgage insurance, which would increase the required salary and require private mortgage insurance.