Among the nation’s 25 largest metropolitan areas, Atlanta continues to remain at the top, ranking No. 2 in the top five most affordable U.S. metropolitan cities to live in according to a new report from Interest.com. Switching places with Minneapolis for the top spot this year, Atlanta continues to attract home buyers.
After taking the No. 1 spot in 2013, Atlanta slipped to second place due to a rise in home prices this year. However, compared to the nations other median home prices, buyers are attracted to Atlanta’s $166,200 median home price according to Interest.com’s 2014 Housing Affordability Study.
Nationally, the median home price used in the report was up six percent over the past year, while median incomes rose by only two percent. In Atlanta, home prices were up 16 percent, or more than three times the national average, which contributed to its fall to the No. 2 spot. This shift in home prices also tilts the average away from affordability, as the median-income household can now only afford a median-priced home in just 10 of the 25 metros.
Also recently released was a report by HSH.com, a mortgage information website, highlighting the minimum salary you must earn to buy a home in 27 of the nation’s metro areas, including Atlanta. To determine this number, HSH.com took the third-quarter data for median home prices from the National Association of Realtors and HSH.com’s third-quarter average interest rate for 30-year fixed-rate mortgages to determine how much of your salary it would take to afford the base cost of owning a home – principal, interest, taxes and insurance. In the equation, HSH.com used standard 28 percent debt ratios and a 20 percent down payment figure.
Nationally, the income needed to afford a median priced home of $217,300 is $51,246.61. In Atlanta, the mortgage rate was calculated as being 4.23 percent with a median home price of $167,500. This makes the monthly payment $884.10, meaning the minimum salary needed to afford the median priced home in Atlanta is $37,889.82. Using this method, Atlanta was the sixth most affordable city to own of the 27 surveyed.
While home prices are rising, interest rates are still low, making now a great time to purchase a new home in metro Atlanta. For more Atlanta new home news, click here.