SouthernWorldwide.com – While U.S. workers have seen a roughly 4% increase in pay this year, with median household income reaching approximately $88,000 in April, this figure 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 purchase an average home.
This necessary income is down from a peak of $122,000 in mid-2025, according to Redfin’s recent report. The National Association of Realtors indicates that the typical home price across the U.S. is currently close to $418,000.
Redfin’s analysis reveals that a household earning the average U.S. income would need to allocate 40% of their earnings towards the median-priced home. Financial experts generally recommend that monthly mortgage payments should not exceed 30% of annual income, after making a 15% down payment.
“Homebuying in the U.S. continues to be unaffordable,” stated Nancy Vanden Houten, lead U.S. economist at Oxford Economics, in a client note. She further commented that this trend is expected to persist for the next decade.
Redfin’s data highlights that the median salary of nearly $88,000 is insufficient for purchasing a home in 41 out of the 49 most populous U.S. cities. San Francisco, recognized as the most expensive city for homeownership, requires an income exceeding five times the median salary, nearly $444,000, to afford a home.
This situation in San Francisco is attributed to housing inventory struggling to meet demand, fueled by the AI boom that attracts more tech workers to Silicon Valley, as reported by Redfin. In March, the median sales price in San Francisco stood at $1.7 million. Residents of San Jose, also located in the heart of Silicon Valley, need an income of approximately $426,000.
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Conversely, Redfin identifies eight cities where the median income is adequate for buying a home, with six of these located in the Midwest. Detroit serves as an example, where a household needs to earn $56,219 to purchase a home, a figure lower than the city’s estimated median income of $65,687 and the overall U.S. median, according to Redfin.
Other cities where an annual income of $88,000 is sufficient to afford a home include:
- Cleveland, Ohio (local median income: $73,261)
- Pittsburgh, Pennsylvania (local median income: $73,411)
- St. Louis, Missouri (local median income: $77,743)
- Philadelphia, Pennsylvania (local median income: $85,541)
- Cincinnati, Ohio (local median income: $85,615)
- Indianapolis, Indiana (local median income: $86,460)
- Warren, Michigan (local median income: $86,880)
Housing affordability has seen a slight improvement over the past six months, as wage growth has outpaced home price increases and mortgage rates have eased, according to Oxford Economics.
However, homeownership remains unattainable for millions. A February CBS News poll revealed that over 80% of Americans believe it is more difficult to buy a home today compared to previous generations.
“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 noted.
