In its latest quarterly report on home affordability for 172 metros, NerdWallet finds that Decatur, Ill. is the most affordable while San Jose, Calif. is the least affordable.
The median house in Decatur costs one and a half times the median annual income, whereas in San Jose, the median single-family home costs roughly 12 times the typical household income, representing the poles of affordability in NerdWallet's study. San Jose's median home price is $1.37 million, and median household income is $110,040, versus Decatur's median home price is $73,000 and the median household income is $46,198.
NerdWallet calculates home affordability by comparing the median annual household income and the monthly principal-and-interest payment for a median-priced single-family home. After accounting for a 20 percent down payment, the house payments were calculated at an interest rate of 4.45 percent, the average rate for a 30-year fixed-rate mortgage in the first quarter; payments don’t include insurance, property taxes or homeowner association dues.