Annual Income Required to Afford an Average Home in Montana
HowMuch.net just released a study showing the income required to purchase an average home in all 50 states. The housing market has been on a steady rise lately for most of the country. In Montana, many cities are working on increasing the availability of affordable housing as prices continues to skyrocket.
"We collected average home prices for every state from Zillow which we then plugged into a mortgage calculator to figure out monthly payments. Remember, mortgage payments consist of both the principal and the interest for the loan. The interest rate we used varied from 4 to 5% in each state, depending on the market. The lower the interest rate, the lower the monthly payment. To keep things simple, we assumed buyers could contribute a 10% down payment. Another thing to keep in mind is that financial advisors commonly recommend the total cost of housing take up no more than 30% of gross income (the amount before taxes, retirement savings, etc.). Using this rule as our benchmark, we calculated the minimum salary required to afford the average home in each state."
According to the article, the annual income required to purchase an "average" home is $75,520. Unfortunately, for a lot of Montanans, wages have not been on the rise, making home ownership unattainable for many.
To see the annual income required to purchase a home in all 50 states, click here.