Americans Need to Make 6 Figures to Afford an Average House

In today’s real estate market, buying a home has become increasingly challenging for many Americans. According to a recent report by Zillow, the median household income in the United States is $82,200, while it now takes a salary of around $99,800 to afford a typical home. This means that a household earning the median income would need a raise of $17,670 to make a purchase.

Even with enough savings for a 20% down payment on a home at the median U.S. home price of $367,969, high mortgage rates would push a buyer’s monthly payment to uncomfortable levels for anyone earning less than six figures. The gap between the median household income and the income needed to buy a house becomes even wider when calculated based on a 10% down payment, requiring a raise of $36,287, according to the Zillow report.

The landscape of affordability has shifted significantly over the past five years, with only 11 major markets left where the typical household can afford a median-priced home. This decline has led to an increase in demand for single-family rentals and a rise in the median age of renters.

A similar affordability report by Realtor.com found that the typical U.S. household would need to spend 44.6% of their income to afford a median-priced home as of May 2025, well above the recommended 30% threshold. Median earners can only afford the typical home in three of the 50 largest cities: Detroit, Pittsburgh, and St. Louis.

For those with regular salaries in other cities, spending more than 30% of their income on housing costs may be necessary, but caution is advised. Real estate experts recommend spending roughly 30% or less of pre-tax income on housing to leave room for other expenses and savings. Mortgage lenders typically require a debt-to-income ratio below a maximum threshold, making approval more challenging for those with a DTI over 30%.

In the most expensive cities, such as Los Angeles, the statistics are startling, with typical annual housing costs exceeding annual income. Affordability in these markets would require down payments of 80% to 95%, making homeownership out of reach for many renters.

As the housing market continues to present challenges for potential buyers, it’s essential to carefully consider affordability and work with lenders to explore all options. With rising home prices and mortgage rates, finding a home within budget may require creative solutions and careful financial planning.

For more insights on the current housing market and mortgage lenders of 2025, check out the latest articles on Money’s website. Stay informed about the unexpected factors that could impact home prices and make informed decisions about your real estate investments.