SouthernWorldwide.com – While U.S. workers’ pay has seen a roughly 4% increase this year, with the median household income reaching approximately $88,000 in April according to government data, this figure still falls significantly short of the income needed to afford a home.
Online real estate firm Redfin estimates that Americans require an annual income of $116,780 to afford the average home. This figure represents a decrease from its peak of $122,000 in mid-2025.
The typical property in the U.S. now costs close to $418,000, as reported by the National Association of Realtors. Redfin’s analysis indicates that a household earning the average U.S. income would need to allocate 40% of its earnings towards the median-priced home.
Financial experts generally recommend keeping monthly mortgage payments at or below 30% of annual income, after making a 15% down payment. However, the current market conditions make this goal difficult to achieve for many.
“Homebuying in the U.S. continues to be unaffordable,” stated Nancy Vanden Houten, lead U.S. economist at Oxford Economics. She further commented that this situation is expected to persist for the next decade.
Redfin’s data highlights that the median salary of nearly $88,000 is insufficient to purchase a home in 41 out of the 49 most populous U.S. cities. San Francisco, known for its high cost of living, requires an income of over five times the median salary, close to $444,000, to afford a home.
This affordability challenge in San Francisco is exacerbated by a housing inventory that struggles to meet the demand driven by the AI boom, which attracts more tech professionals to Silicon Valley, according to Redfin. In March, the median sales price in San Francisco stood at $1.7 million.
Residents of San Jose, another prominent city in Silicon Valley, need an income of approximately $426,000 to afford a home. The high demand and limited supply in these tech hubs significantly inflate housing prices.
Conversely, Redfin identifies eight cities where the median income is sufficient to purchase a home, with six of these located in the Midwest. In Detroit, for instance, a household would need to earn $56,219 to buy a home, a figure below the city’s estimated median income of $65,687 and the overall U.S. median income.
Other cities where an annual income of $88,000 is enough to afford a home, along with their respective local median incomes, include:
- Cleveland, Ohio ($73,261)
- Pittsburgh, Pennsylvania ($73,411)
- St. Louis, Missouri ($77,743)
- Philadelphia, Pennsylvania ($85,541)
- Cincinnati, Ohio ($85,615)
- Indianapolis, Indiana ($86,460)
- Warren, Michigan ($86,880)
Over the past six months, housing has become slightly more affordable. This improvement is attributed to people’s earnings rising at a faster pace than home prices, coupled with a moderation in mortgage rates, according to Oxford Economics.
Despite these slight improvements, homeownership remains an unattainable goal for millions of Americans. A February poll conducted by CBS News revealed that over 80% of Americans believe it is more difficult to buy a home today compared to previous generations.
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“More than twice as many Americans live in the top 10 states with the highest home price-to-income ratios compared to the 10 states with the lowest price-to-income ratios, where homebuying is more affordable,” Vanden Houten observed, highlighting the significant regional disparities in housing affordability.
