San Jose named second-most expensive US city to buy a home - Silicon Valley Business Journal

San Jose is one of eight U.S. cities where one would need to earn more than $200,000 a year to afford a home,The analysis found that average homebuyer in the United States now needs a salary of $107,281 to afford the typical $2,682 monthly mortgage payment on a U.S. home, up 45.6% from $73,668 a year ago. In San Jose, the salary requirement is closer to $363,265 in order to afford a home in the city's median price of $1,350,000 — placing it just second in the lineup of most expensive U.S.

Other Bay Area cities that made the list were San Francisco, where homebuyers would need a salary of about $402,821 to afford a median-priced home , making it the most expensive according to the report; and Oakland, where homebuyers would need to earn $247,559 to afford the median home price of $920,000.

The study found that the income to required to buy a home increased significantly as mortgage rates rose"at their fastest pace in history," reaching 7% by the end of October, according to afrom loan mortgage corporation Freddie Mac. However, the average national hourly wage only grew by about 5% in the same time period, with inflation weakening buying power.

"High rates are making buyers rethink their priorities, as many of them can no longer afford the home they want in the location they want," said Washington, D.C. Redfin agent Chelsea Traylor, in a statement."If you had a $900,000 budget a few months ago, rising rates mean it’s now around $700,000 — and sellers aren’t dropping their prices enough to make up for the change.

“I’m encouraging buyers to think long term,” Traylor continued. “Prices are unlikely to fall drastically in the long run, so buying a home now – if you can afford the monthly payment – will still help you build wealth over time, especially if you plan to live in it for several years. Even though rates are high, another advantage of buying now is the lack of competition and opportunity to negotiate with sellers.

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