Homes in metro Phoenix have become less affordable due to rising costs as the population in the area continues to grow.
The median home price has shot up across the Valley, hitting $469,500 during the third quarter of 2024, which is nearly $70,000 more than the national median new home price, according to data from the National Association of Hispanic Builders’ Cost of Housing Index.
The index findings showed Phoenix ranked among the 50 least affordable metro areas out of the 176 metro-area markets analyzed, with a cost of housing index of 38% and a low-income index of 76%. This means a typical family earning the area’s median income of about $100,000 would need to spend 38% of its gross income to afford a median-priced home, while a low-income family earning 50% or less would need to spend more than 70%, according to the index report.
Still, the amount Phoenix families can afford for a home varies based on factors like credit score, down payment and other debts. If you’re interested in buying a house, here are some estimates to guide your budget. These are general numbers that may not fully capture each family’s exact situation. Speaking with a home lending advisor would give you a more accurate picture.
Here’s what you need to know about home prices in metro Phoenix, how much you might afford based on your income, and assistance programs available for first-time buyers.
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How much of your income should go to your mortgage?
In general, most experts suggest your housing costs should be limited to 28% of your total monthly pretax income. They also recommend that you should be paying no more than 36% of your total income on housing costs and paying off debts. Your total debt could include expenses like car loans, student loans, credit card debt, child care and alimony.
The following calculations assume a family can spend 28% of their pretax income on a 30-year term mortgage at a 6.7% interest rate, which is the average from lenders quoting on Zillow for preliminary research purposes. These estimations exclude taxes, insurance costs, HOA fees and other monthly debt, but they do include private mortgage insurance, which is a required protection that primarily applies to borrowers on a conventional loan with a down payment of less than 20% of the home’s purchase price.
More:Metro Phoenix rents fall in several cities; some affordable areas see jumps
How much house can you afford on a $50K annual salary?
A house of up to about $181,000 would comfortably fit the budget of a household with a $50,000 annual income, according to Zillow’s mortgage affordability calculator.
Monthly payments for a house of this price would sit at about $1,070, excluding taxes, utilities, insurance costs, HOA fees and other monthly debt. This calculation assumes a down payment of $18,000.
How much house can you afford on a $75K annual salary?
A house of up to about $271,500 would comfortably fit the budget of a household with a $75,000 annual income, according to Zillow’s mortgage affordability calculator.
Monthly payments for a house of this price would sit at about $1,580, excluding taxes, utilities, insurance costs, HOA fees and other monthly debt. This calculation assumes a down payment of $27,000.
How much house can you afford on a $100K annual salary?
A house of up to about $362,000 would comfortably fit the budget of a household with a $100,000 annual income, according to Zillow’s mortgage affordability calculator.
Monthly payments for a house of this price would sit at about $2,100, excluding taxes, utilities, insurance costs, HOA fees and other monthly debt. This calculation assumes a down payment of $36,000.
How much house can you afford on a $125K annual salary?
A house of up to about $452,500 would comfortably fit the budget of a household with a $125,000 annual income, according to Zillow’s mortgage affordability calculator.
Monthly payments for a house of this price would sit at about $2,630, excluding taxes, utilities, insurance costs, HOA fees and other monthly debt. This calculation assumes a down payment of $45,000.
How much house can you afford on a $150K annual salary?
A house of up to about $543,000 would comfortably fit the budget of a household with a $150,000 annual income, according to Zillow’s mortgage affordability calculator.
Monthly payments for a house of this price would sit at about $3,150, excluding taxes, utilities, insurance costs, HOA fees and other monthly debt. This calculation assumes a down payment of $54,000.
Homeownership resources
Here’s a list of resources for finding affordable places to live and navigating homeownership in Arizona from the U.S. Department of Housing and Urban Development website.
You can find the full list at hud.gov/states/arizona.
- Get help finding affordable places to live: Speak to a HUD Approved Housing Counselor for advice on your specific housing needs. Search online for a HUD Approved Housing Counselor near you or call 800-569-4287. You can also contact your local Public Housing Authority for information about public housing programs like Housing Choice Vouchers. Arizona’s Public Housing Authority phone number is 602-771-1000, or you can call 800-955-2232 for help to find your local Public Housing Authority.
- Information about becoming a homeowner: Learn more about homebuying from HUD’s website or the Consumer Financial Protection Bureau.
- Information about Federal Housing Administration (FHA) loans and programs: Visit answers.hud.gov/FHA/s/. You can also call the Federal Housing Administration toll-free at 800-CALL-FHA (800-225-5342) or email the U.S. Department of Housing and Urban Development at answers@hud.gov.
- Information about HUD homes: Use the HUD Home Store to find HUD homes for sale.
See the full Housing Inventory article, or, read more Arizona real estate investing news. Up to you! Either way, you’re on your game!
