iStock illustration
Greater Boston homebuyers will likely need a raise if they want to buy a home – even if they’re so-called “move-up” buyers putting 20 percent down.
According to a new analysis by Zillow, a prospective homebuyer in the Boston metro area earning the median annual income and making a 20 percent down payment would still need a $78,703 raise in order to afford the mortgage payment on the median-priced home and not have it break 30 percent of their income.
Zillow pegged the median Greater Boston home value at $733,270, including both condominiums and single-family homes in its calculations. The Warren Group, publisher of Banker & Tradesman, reported that the year-to-date median single-family sale price within the Interstate 495 corridor hit $785,000 in May, while the median condo sale price hit $630,000.
In addition to home price appreciation, home insurance premiums are also driving up the cost of homeownership.
Premiums across the nation increased by 57 percent from 2019 to 2024, according to Harvard’s Joint Center for Housing Studies.
In a seven-county area stretching from Buzzards Bay to the New Hampshire-Maine line, Harvard JCHS researchers say that taxes and insurance cost the buyer of the median home $1,292 a month in the first quarter of 2025. On Cape Cod the monthly figure is $1,233, while in the Worcester metro it’s $884 and in the Pioneer Valley it’s $706.
Those Harvard researchers calculated the median Eastern Massachusetts/Seacoast New Hampshire buyer would need a median income of $229,255 if they’re putting 3.5 percent down – typical for a first-time buyer – while on Cape Cod the median home needs an income of $226,924. But in Worcester County it’s a mere $144,616 and in the Pioneer Valley it was only $110,857.
“Affordability remains a steep hill to climb, especially for first-time buyers,” Kara Ng, a senior economist at Zillow, said in a statement released along with that company’s analysis. “While the financial bar has gotten higher, we’re also in the middle of the most buyer-friendly spring since before the pandemic for those who can make the finances work. Inventory is up, prices are softening, and sellers are negotiating. To make homeownership more broadly accessible, though, we need lasting solutions, starting with policies that allow more homes to be built in the right places.”
Elsewhere in New England, Hartford is close to the national average. Homebuyers in the Connecticut capital region will also need a pay raise, but not as steep, only requiring a $16,104 increase to afford the median home.
A median-income family would need a $17,670 raise to afford the mortgage payments on a typical U.S. home. Median-income households can afford the average home in just 11 major markets, down from 39 markets five years ago, Zillow’s analysis found.
Banker & Tradesman staff writer James Sanna contributed to this report.
