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The Struggle to Afford Homes in High-Value ZIP CodesThe Struggle to Afford Homes in High-Value ZIP Codes

For many, the dream of owning a home is becoming increasingly out of reach. Unyielding home prices have overridden the sluggish rise in salaries, causing an alarming gap between home affordability and income. In certain ZIP codes, this chasm is even wider, making a six-figure salary essential to even consider purchasing a property. Here we delve into 15 ZIP codes where the average home price is so prodigious that an annual income of $400,000 or more is a prerequisite to afford a residence.

The Analysis

The ghastly reality was revealed by GOBankingRates, who meticulously scrutinized the 2,500 largest ZIP codes in the United States along with their average home values. The investigation unearthed the monthly mortgage payment for each area based on a 30-year fixed-rate loan with a 6.62% interest rate. The pivotal threshold was defined as a mortgage payment not exceeding 30% of a household’s gross income. Unsurprisingly, only the three most exorbitantly priced ZIP codes for each city were included in the final rankings.

The Priciest ZIP Codes

Claiming the top spot is New York’s Upper East Side, Manhattan (ZIP code 10021), where the average home commands an eye-watering $3,289,757. Prospective buyers would be saddled with a monthly mortgage payment of $16,843, demanding a salary of $673,722. Meanwhile, the exclusive enclave of Hillsborough, California (ZIP code 94010) occupies the second spot, with an average home value of $3,263,479, necessitating an income of $668,340 to afford the exorbitant mortgage payment of $16,709 per month.

The Brooklyn Heights Dilemma

New York’s Brooklyn Heights (ZIP code 11201) clinches the third place, with an average home value standing at $3,178,598, and a monthly mortgage payment of $16,274, deepening the chasm for aspiring homeowners who would need a salary of $650,957. Rounding out the top five are Chelsea, Manhattan (ZIP code 10011) at a staggering average home value of $2,940,281, and West LA (ZIP code 90024) in Los Angeles, where homes command an average value of $2,717,587.

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The struggle is prominent in Menlo Park, California (ZIP code 94025), where the average home value is $2,648,721, calling for a salary of $542,441 to manage the monthly mortgage payment of $13,561. This harsh reality leaves a poignant question lingering – how do average earners reconcile the American dream with such exorbitant real estate prices?