The income needed to buy a home in major U.S. cities

Tracking the rising income needed to afford a home

From 2012 to 2024, the typical monthly home payment nearly tripled — from $1,091 to $2,889. To afford a home in 2024, an average American household needed to bring in $123,826 a year. That’s about $77,000 more than a dozen years ago, an increase of 164.9%. (As of April 2025, residents need to earn about $124,817 to afford a typical home, while the median household income is just $77,719.)

With the exception of a brief blip in 2014 (when the income needed to afford a home was just $253 higher than the national median income — a difference of 0.5%), the turning point at which income needed to afford a home began to consistently outpace the median household income arrived in 2017. That year, a household needed an income of $61,935 to afford a typical home, while the median household income in the U.S. lagged a bit behind at just $60,336.

Since 2020, the gap has widened at alarming rates. In just four years, the income needed to afford a home rose by nearly $57,000, an increase of more than 85%.

Note the steep jump between 2021 and 2022. In this period, the total monthly home payment (and therefore, the income needed to comfortably afford that home) increased by a staggering rate of 40%, while the nationwide median household income only rose by about 7% in the same period. The gulf grew even more the following year: By 2023, households needed over $120,000 to afford a home, but the median household income was only $77,719 — a difference of nearly 55%.

More than two-thirds of homebuyers (68%) are couples, who may have two incomes to put toward housing costs. However, some households rely on the income of just one earner — like the 28% of homebuyers in 2024 who were single men or women, according to the National Association of Realtors.

Cities that require the most income to buy a home

The cities that require the most income to afford a home are largely concentrated in California. Rounding out the top 10 is Honolulu, Hawaii, with an annual household income threshold of nearly $278,000. (Typical home payments in Hawaii’s capital approach $6,500 a month.)

Residents in the following cities need the highest incomes to afford the monthly costs of owning a typical home:

1. San Jose, California: $547,368
2. San Francisco, California: $386,359
3. Santa Cruz, California: $377,260
4. Santa Maria, California: $324,300
5. Los Angeles, California: $318,103
6. San Diego, California: $310,119
7. San Luis Obispo, California: $293,793
8. Oxnard, California: $292,252
9. Salinas, California: $279,321
10. Honolulu, Hawaii: $277,997

Honolulu’s stats are enough to give any prospective homebuyer pause, but they pale in comparison with those in San Jose, California, where households need to bring in almost twice as much money to afford a home. At $157,444, the median household income in this Silicon Valley city is more than double the national average ($77,719), but it’s not even a third of the household income needed ($547,368) to stay on budget. Typical monthly home payments in San Jose exceed an eye-watering $12,700.

Whether in the Golden State or the Aloha State, what these top-ranked cities have in common is a housing affordability crisis. Restrictive zoning and construction policies have contributed to an extreme shortfall of housing supply in California and Hawaii. A surge in homebuying demand during the low interest rates of the coronavirus pandemic years only made things worse. Together, these factors have driven prices sky-high. (In fact, as of April 2025, the 10 cities that require the most income to buy a home hold the top 10 ranks for highest home value — in sequential order.)

“One of the biggest culprits for rising house prices is the lack of affordable housing supply,” according to Visalli of the Urban Institute.

Cities that require the least income to buy a home

While the cities that require the most income to buy a home are largely concentrated in California, the cities where residents can afford a home on the lowest household incomes are geographically more spread out. The South is the most represented region, with seven of the top 10 metros. The Midwest features two cities in the top 10, and the Northeast has one.

Residents in these metros need the lowest incomes to afford a home:

1. Charleston, West Virginia: $49,543
2. Huntington, West Virginia: $52,359
3. Youngstown, Ohio: $58,156
4. Shreveport, Louisiana: $61,796
5. Peoria, Illinois: $63,350
6. Binghamton, New York: $65,155
7. Fort Smith, Arkansas: $65,934
8. Beaumont, Texas: $66,180
9. Mobile, Alabama: $66,969
10. Macon, Georgia: $67,101

While increased demand from the influx of people moving to the South in recent years has pushed home prices higher, the South is still home to some of the most affordable housing in the U.S. — especially if you look to midsize and smaller cities, like those that land in our top 10. The South is home to all five cities where it’s cheaper to buy a home than rent in 2025, and it’s leading the nation in new-home construction, which helps keep home prices in check by increasing supply.

In fact, 29 of the top 50 cities with the lowest incomes needed to afford a home are in the South. And the typical monthly home payment in April 2025 is below the U.S. average ($2,912) in 63 of the 86 Southern cities we analyzed.

Notably, no cities in the West appear in the top 10 cities, or even in the top 100 —  the first Western city to appear in the ranking is Tucson, Arizona, at No. 101, with a yearly income of nearly $115,000 needed to afford a home.

The income needed to buy a home in each U.S. metro

Only 14 of the 200 U.S. metros we compared have median household incomes that exceed $100,000. But in 126 metros, a household needs to earn upward of six figures to afford a typical home. And in 50 of these metros, the threshold is even higher, with households needing to bring in more than $150,000 a year to afford typical monthly home payments. (For perspective, that translates to a wage of more than $72 per hour, assuming a 40-hour workweek.)

How does your city stack up? Check out the full data below:

How to calculate how much house you can afford

For a balanced budget, experts recommend following the “28/36” rule: No more than 28% of your gross monthly income goes toward housing costs, and no more than 36% goes toward your total debts, including housing. Whether you’re a first-time homebuyer or getting back into the housing market, follow these steps to figure out your financial boundaries before you embark on your homebuying journey.

If you’re the sole earner in your household, follow the steps below. If your household has multiple earners, use the total household income.

1. Determine your gross monthly income

Gross monthly income is your total income before taxes. Check your latest pay stub for your gross income per pay period. If you’re paid twice a month, simply double the number; if you’re paid every two weeks, multiply your gross pay by 26, then divide by 12 to get the monthly figure.

2. Calculate your housing budget

Take the gross monthly income you found in the first step and multiply that figure by 0.28. Per the 28/36 rule, the resulting number should be the upper limit for what you spend on housing costs each month.

It may be tempting to push your housing budget higher, but be wary of breaking the bank for a dream home. “Housing researchers often define households as ‘cost burdened’ when they spend over 30% of (their) monthly gross income on housing,” said Visalli from the Urban Institute.

3. Consider all the variables

The equation of how much house you can afford involves a number of critical factors, including:

• Your gross income
• Your chosen mortgage term length (30-year fixed-rate mortgages are the most popular)
• Your annual percentage rate (APR) (check the current mortgage rates here)
• State and local property taxes
• Homeowners insurance costs
• Your down payment

Historically, the largest barrier to homeownership is the upfront cost, said Visalli. In addition to the down payment, you’ll also need to be prepared for sizable closing costs. These costs typically range from 2% to 5% of the loan amount.

As you consider how much money you can put down, research loan options with low down payments. For example, Federal Housing Administration (FHA) loans, which are insured by the government, require a down payment as low as 3.5%. Look into federal, state and local down payment assistance programs that you qualify for: In some cities, like Atlanta, you may be eligible for $20,000 to $25,000 in down payment assistance from the city.

4. Use a mortgage calculator

Once you’ve got all the numbers on the table, plug them into our mortgage calculator to see how the math comes together. You can adjust each variable to see how it impacts your “affordability range,” or you can adjust the mortgage amount to see how a larger or smaller amount borrowed affects estimated monthly payments.

5. Consult a professional

A financial advisor can help you navigate through the total picture of your financial situation, and a mortgage broker will help find the right mortgage loan and the best mortgage lender for your circumstances. Both may be able to point you toward more relevant resources for down payment assistance, too: Visalli recommends Down Payment Resource and Freddie Mac's DPA One, for starters.

Methodology

We analyzed Zillow data from April 2025 on typical monthly home payments in 200 of the largest U.S. metros by population. This metric assumes a 10% down payment and includes mortgage costs, homeowners insurance, property taxes and maintenance expenses.

To calculate the minimum income required to afford a typical home in each metro, we applied the 28/36 rule, which states that households shouldn’t spend more than 28% of their gross monthly income on housing costs.

We also collected supplemental data to provide additional context: 2023 median household income figures from the U.S. Census Bureau, along with April 2025 median home sale prices and typical home values from Zillow. These figures were not included in our affordability calculations but are used to contextualize our findings.

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Questions?

For questions about the data or if you'd like to set up an interview, please contact rsowell@consumeraffairs.com.