Last week, UrbanTurf looked at a study by RealtyTrac which revealed that DC home payments rose 24 percent between the fourth quarter of 2012 and the fourth quarter of 2013, largely the result of increasing home prices and interest rates. This week, we’re looking at the study’s results for Arlington County, which experienced a similar jump in payments.
Monthly payments in Arlington rose 21 percent between 2012 and 2013, in line with the national average (also 21 percent). But it was the rising income needed to purchase the average home in Arlington County that stood out, jumping from $130,881 to $158,474 at the end of 2013. Buying a house requires a higher average qualifying income in just three other counties in the entire U.S. — and the other three are nestled in or near Silicon Valley and San Francisco, the city boasting the second-highest rate of inequality in the country. Alexandria City ranked 8th on the list for qualifying income, and DC came in 12th.
RealtyTrac calculated the minimum qualifying income or every county by assuming that a maximum of 25 percent of a person’s income could go toward a monthly house payment. The calculated house payment included an assumption of a 20 percent down payment with a 30-year fixed interest rate of 4.46 percent for homes purchased in the fourth quarter of 2013, and a 3.35 percent 30-year interest rate for homes purchased the previous year. RealtyTrac also folded in a 1.04 percent annual property tax, 0.40 percent of the purchase price in annual maintenance costs and 0.35 percent of the purchase price in annual home insurance costs. The firm subtracted the tax benefit from the mortgage interest deduction and property tax deduction using a 30 percent income tax rate.
This article originally published at http://dc.urbanturf.com/articles/blog/arlingtons_qualifying_income_fourth-highest_in_u.s/8164
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