Realtor Magazine recently published an analysis by leading online market place Lending Tree, which looked at how much leverage buyers have in the nation’s 50 largest metro areas by comparing how much money is borrowed compared to a person’s income.
While financial experts recommend that home buyers not pay more than three times their annual income for a home, at least 10 metro areas have a loan/income ratio of more than 3.3. Not surprisingly, five out of the top ten most stretched home buyers are located in California.
Most Stretched Homebuyers Per Lending Tree
| Rank | City | Median Income | Median Loan Amount | Leverage Ratio |
|---|---|---|---|---|
| 1 | San Diego, CA | $128,000 | $485,000 | 3.789 |
| 2 | Los Angeles, CA | $138,000 | $505,000 | 3.659 |
| 3 | Salt Lake City, UT | $79,000 | $285,000 | 3.608 |
| 4 | Denver, CO | $101,000 | $355,000 | 3.515 |
| 5 | San Jose, CA | $210,000 | $725,000 | 3.452 |
| 6 | Riverside, CA | $92,000 | $315,000 | 3.424 |
| 7 | San Francisco, CA | $189,000 | $645,000 | 3.413 |
| 8 | Seattle, WA | $119,000 | $405,000 | 3.403 |
| 9 | Las Vegas, NV | $79,000 | $265,000 | 3.354 |
| 10 | Portland, OR | $100,000 | $335,000 | 3.35 |
| 11 | Washington, DC | $114,000 | $375,000 | 3.289 |
| 12 | Sacramento, CA | $103,000 | $335,000 | 3.252 |
| 13 | New York, NY | $122,000 | $385,000 | 3.156 |
| 14 | Boston, MA | $120,000 | $375,000 | 3.125 |
| 15 | Virginia Beach, VA | $76,000 | $235,000 | 3.092 |
| 16 | Providence, RI | $83,000 | $255,000 | 3.072 |
| 17 | Phoenix, AZ | $80,000 | $245,000 | 3.063 |
| 18 | Nashville, TN | $84,000 | $255,000 | 3.036 |
| 19 | Miami, FL | $88,000 | $265,000 | 3.011 |
| 20 | Baltimore, MD | $92,000 | $275,000 | 2.989 |
| 21 | Orlando, FL | $79,000 | $235,000 | 2.975 |
| 22 | Richmond, VA | $80,000 | $235,000 | 2.938 |
| 23 | Minneapolis, MN | $85,000 | $245,000 | 2.882 |
| 24 | Atlanta, GA | $79,000 | $225,000 | 2.848 |
| 25(Tie) | Jacksonville, FL | $77,000 | $215,000 | 2.792 |
| 25(Tie) | Tampa, FL | $77,000 | $215,000 | 2.792 |
| 27 | Charlotte, NC | $82,000 | $225,000 | 2.744 |
| 28 | Raleigh, NC | $94,000 | $255,000 | 2.713 |
| 29 | Louisville, KY | $66,000 | $175,000 | 2.652 |
| 30 | New Orleans, LA | $78,000 | $205,000 | 2.628 |
| 31 | San Antonio, TX | $82,000 | $215,000 | 2.622 |
| 32 | Birmingham, AL | $71,000 | $185,000 | 2.606 |
| 33 | Philadelphia, PA | $87,000 | $225,000 | 2.586 |
| 34 | Dallas, TX | $96,000 | $245,000 | 2.552 |
| 35(Tie) | Hartford, CT | $82,000 | $205,000 | 2.5 |
| 35(Tie) | Indianapolis, IN | $74,000 | $185,000 | 2.5 |
| 37 | Chicago, IL | $79,500 | $195,000 | 2.453 |
| 38(Tie) | Columbus, OH | $80,000 | $195,000 | 2.438 |
| 38(Tie) | Kansas City, MO | $80,000 | $195,000 | 2.438 |
| 40 | Detroit, MI | $72,000 | $175,000 | 2.431 |
| 41 | Memphis, TN | $77,000 | $185,000 | 2.403 |
| 42 | Austin, TX | $107,000 | $255,000 | 2.383 |
| 43 | Houston, TX | $91,000 | $215,000 | 2.363 |
| 44 | Milwaukee, WI | $83,000 | $195,000 | 2.349 |
| 45(Tie) | Cincinnati, OH | $75,000 | $175,000 | 2.333 |
| 45(Tie) | St. Louis, MO | $75,000 | $175,000 | 2.333 |
| 47 | Oklahoma City, OK | $73,000 | $165,000 | 2.26 |
| 48 | Cleveland, OH | $72,000 | $155,000 | 2.153 |
| 49 | Buffalo, NY | $69,000 | $145,000 | 2.101 |
| 50 | Pittsburgh, PA | $79,000 | $165,000 | 2.089 |