Check your home buying power – Seattle gets ‘C-minus’

Seattle received a “C-minus” grade in an affordability study of the 25 largest metropolitan areas in the U.S., according to research released by Interest.com, a Bankrate company.

A median-income household can only afford a median-priced home in 14 of the nation’s 25 largest metropolitan areas, the study revealed. Atlanta, Detroit and Minneapolis-St. Paul are the most affordable cities while San Diego, New York and San Francisco are the least affordable.

An Affordability Grade of “C” means someone making the median income can afford the median priced home. While Seattle had the fifth highest median income ($64,085) of the 25 major metros, its Paycheck Power Rating was a minus 0.63 percent. The Paycheck Power Rating is the percent the median income exceeds or falls short of the income required for a median priced home.

You can use the same calculators to determine how much you can afford to borrow and how much you must make to afford any home.

Significant differences in median incomes, as well as critical costs such as property taxes and homeowners insurance, play a big role in determining whether the dream of home ownership is truly within reach.

“Despite all of the talk about how homes are more affordable than they have been in decades, buying a home is still a big challenge for many American households,” said Mike Sante, managing editor of Interest.com.

Data from the U.S. Census Bureau, National Association of Realtors, National Association of Insurance Commissioners and Experian, one of the three major credit reporting agencies, all contributed to the analysis.