The temperature isn’t the only thing rising this time of year. During the summer months, home buyers come out in droves and the housing market heats up fast! Houses are moving very fast in this competitive market and buyers must move quickly to get the home of their dreams. If you are currently looking to buy a home, there’s no doubt that you’ve been researching home prices in your desired area. However, have you looked into what you can afford based on your current income?
According to HSH.com, here is what you need to earn in order to afford a home in different Midwestern cities based on paying 20% down:
Minneapolis, MN
Average Home Price: $234,700
Mortgage Rate: 4.29%
Monthly Payment: $1,254.90
Salary Required: $53,781
Chicago, IL
Average Home Price: $228,600
Mortgage Rate: 4.29%
Monthly Payment: $1,386.20
Salary Required: $59,408
St. Louis, MO
Average Home Price: $154,900
Mortgage Rate: 4.29%
Monthly Payment: $885.42
Salary Required: $37,947
While these numbers may help you get a feel for what you can afford, they should not be used to dissuade potential homebuyers from moving forward. A financial planner can help a homebuyer better understand their current buying power or help them establish a financial plan to help them purchase a home in the future.
Whether you’re looking to purchase your first home, move up, or downsize, follow these steps to better understand your purchasing power in the housing market:
- Find a financial advisor in your area if you don’t already have one
- Schedule a meeting to discuss your intentions to purchase a home
- Come to the meeting prepared with information describing your current financial management practices as well as your future financial plans
During this meeting, your financial planning advisor will help you understand how purchasing a home will affect both your short and long-term financial management goals.
