Your homebuying power is impacted by where you live, the type of property you want to buy, and perhaps most importantly, by how much you earn. Depending on your occupation and industry, you might easily afford a million-dollar home, or you might need to save for several additional years just to cover the down payment. So which professions have the greatest homebuying power?
Zoocasa analyzed the most recent annual mean wage data from the U.S. Bureau of Labor Statistics and calculated the maximum affordability for each occupation using calculator.net’s “How Much House Can I Afford?” calculator. Using calculator.net’s “How Much House Can I Afford?” calculator, we assumed a 20% down payment and a 30-year mortgage at a rate of 6.87%, which was the average 30-year mortgage rate according to Freddie Mac at the time of writing. Taxes, insurance, heating, and other expenses and debts were not factored into the calculation.
Medical Field Professionals Can Afford The Most Expensive Homes
Medical professionals typically earn high salaries, enabling them to afford some of the most expensive homes on the market. In fact, the only occupations on our list that can afford a home above $1,000,000 are medical professionals, such as radiologists, dermatologists, and orthodontists.
Cardiologists earn an annual mean salary of $423,250 - the highest on our list - meaning they can afford the most expensive home on our list at $1,880,123. Assuming the homebuyer is putting 20% down, the down payment would come out to $376,025, which is higher than the annual mean wage of every occupation on our list.
Outside of the medical field, there are just a few professions with an annual mean salary above $150,000. Those include lawyers, computer and information systems managers, financial managers, marketing managers, and human resources managers. These high-earning occupations can afford homes costing between $680,000 to as high as $800,000 depending on the specific job.
However, homes of those prices come with a cost: high monthly mortgage payments. The monthly mortgage payment for a home costing $687,372, which is what a human resources manager could afford, amounts to $3,611. For a cardiologist purchasing a home costing $1,880,123, the monthly mortgage payment comes out to $9,876.
Managerial Jobs Can Afford Homes Above the National Median
According to the National Association of Realtors®, the national median single-family home price in Q1 of 2024 was $389,400. Though this is 5% higher than the national median in Q1 of 2023, 55 occupations can afford a home above the national median.
The majority of occupations that can afford a home above the national median are managerial jobs or jobs that require an advanced degree or skillset. Professions such as veterinarians, software developers, and pharmacists can afford homes costing around $600,000, while sales representatives, construction managers, and electrical engineers can afford homes costing around $500,000.
Architects, dental hygienists, and accountants can afford homes costing around $400,000. For these professions, typical down payments are about $80,000 and monthly mortgage payments are around $2,100.
The Majority of Occupations Cannot Afford the Median Home Price
Out of 125 occupations, 69 cannot afford the national median home price of $389,400. The path to homeownership is steeper for Americans just starting out in their careers or working in the service or hospitality industries. Those with an annual salary below $80,000 may need to consider purchasing properties outside major urban centers or opt for condo-townhouses rather than single-family homes.
For example, hairdressers and cosmetologists, with an annual mean salary of $41,780, can afford a home priced around $185,591. According to the National Association of Realtors, some metropolitan areas still have median single-family home prices at or below that amount. However, these tend to be in less densely populated cities such as Akron, Ohio, Binghamton, NY, and Springfield, Illinois.
Looking for your first home this year? It’s important to speak with a realtor who is familiar with your local real estate market. Give us a call today to discuss your home-buying plans.
