You’ll Need To Earn $400K or More To Afford Homes in These 15 ZIP Codes

Gabrielle Olya

March 20, 2024 at 5:00 p.m.·3 min read

Home prices are rising at a faster pace than wages, making it difficult for the average income earner to afford a home. In some ZIP codes, the discrepancy between earnings and home prices is even higher — and in these 15 ZIP codes, you would need to earn a salary of $400,000 or higher to afford the average home.

GOBankingRates determined the ZIP codes that require prospective homebuyers to earn $400,000 or more by analyzing the 2,500 largest ZIP codes in the U.S. along with the average home value. Once this figure was found, GOBankingRates found the monthly mortgage payment for each ZIP code by assuming a 30-year fixed-rate loan with a 6.62% interest rate. From there, GOBankingRates found the ZIP codes where one would need a six-figure salary to comfortably afford the mortgage payment, defined as no more than 30% of gross income going towards the mortgage payment. If a city had multiple ZIP codes qualify, only the three most expensive were included in the final rankings.

Here’s a look at the ZIP codes that only high income-earners could afford.

1. New York (10021) — Upper East Side, Manhattan

Average home value: $3,289,757
Monthly mortgage payment: $16,843
Salary needed: $673,722

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2. Hillsborough, California (94010)

Average home value: $3,263,479
Monthly mortgage payment: $16,709
Salary needed: $668,340

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3. New York (11201) — Brooklyn Heights, Brooklyn

Average home value: $3,178,598
Monthly mortgage payment: $16,274
Salary needed: $650,957

4. New York (10011) — Chelsea, Manhattan

Average home value: $2,940,281
Monthly mortgage payment: $15,054
Salary needed: $602,151

5. Los Angeles (90024) — West LA

Average home value: $2,717,587
Monthly mortgage payment: $13,914
Salary needed: $556,545

6. Menlo Park, California (94025)

Average home value: $2,648,721
Monthly mortgage payment: $13,561
Salary needed: $542,441

7. Cupertino, California (95014)

Average home value: $2,617,860
Monthly mortgage payment: $13,403
Salary needed: $536,121

8. San Francisco (94118)

Average home value: $2,322,940
Monthly mortgage payment: $11,893
Salary needed: $475,724

9. Sunnyvale, California (94087)

Average home value: $2,322,521
Monthly mortgage payment: $11,891
Salary needed: $475,638

10. San Francisco (94117)

Average home value: $2,305,852
Monthly mortgage payment: $11,806
Salary needed: $472,224

11. San Jose, California (95129)

Average home value: $2,225,564
Monthly mortgage payment: $11,395
Salary needed: $455,782

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12. East Palo Alto, California (94303)

Average home value: $2,086,698
Monthly mortgage payment: $10,684
Salary needed: $427,343

Andrei Stanescu / Getty Images/iStockphoto

13. Fremont, California (94539)

Average home value: $2,012,687
Monthly mortgage payment: $10,305
Salary needed: $412,186

14. San Diego (92130)

Average home value: $1,993,156
Monthly mortgage payment: $10,205
Salary needed: $408,186

15. San Jose, California (95120)

Average home value: $1,957,501
Monthly mortgage payment: $10,022
Salary needed: $400,884

Photo disclaimer: Photos may not depict the exact ZIP code.

Methodology: For this piece, GOBankingRates found the 2,500 largest ZIP codes and the (1) 2023 average home value from Zillow’s November 2023 data. Once this figure was found GOBankingRates found the (2) monthly mortgage payment for each ZI{ code by assuming one is taking a 30-year fixed-rate loan with a 6.62% interest rate, as sourced from the Federal Reserve Bank of St. Louis on Jan. 4, 2024. From there, GOBankingRates found the 50 most expensive ZIP codes where one would need a six-figure salary to comfortably afford the mortgage payment (no more than 30% of gross income going towards the mortgage payment). If a city had multiple ZIP codes qualify, only the three most expensive were included in the final rankings. All data was collected and is up to date as of Jan. 8, 2024.

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This article originally appeared on GOBankingRates.com: You’ll Need To Earn $400K or More To Afford Homes in These 15 ZIP Codes

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