02-05-2025
Depressing data shows families need to earn 70% more than they did 6 years ago to buy a home
The income needed for a family to buy a typical home in the U.S. has surged by an eye-popping 70% over the past six years, highlighting the mounting housing affordability challenges.
Compared with spring 2019, the national household income required to buy a median-priced home has jumped by nearly $47,000, largely driven by increasing home prices and elevated mortgage rates, according to the April 2025 Inventory Report.
Advertisement
To purchase a house at the national median list price of $431,250 in April, a household needed to earn about $114,000 annually.
That figure assumes a 30-year fixed mortgage, a 20% down payment, and the '30% rule,' which recommends that consumers spend no more than 30% of their gross income on housing costs.
This means you would need to earn about $9,500 a month before taxes to comfortably cover the mortgage, property taxes, and insurance on a typical home.
4 The national household income required to buy a median-priced home has increased by almost $47,000 since spring 2019.
Africa Studio –
Advertisement
But there's a hitch: According to the latest data from the U.S. Census Bureau, in 2023, the typical household earned just over $80,600 per year, or approximately 41% less than the recommended income.
The only bit of good news for potential homebuyers is that the required income has held mostly steady over the past year, largely because mortgage rates and median home prices have remained flat.
'While the income needed to purchase a home has leveled off nationally over the past year, it remains significantly higher than before the [COVID-19] pandemic, underscoring the ongoing challenge of affordability even as market conditions gradually rebalance,' says Chief Economist Danielle Hale.
4 The income required to buy a home 'remains significantly higher than before the [COVID-19] pandemic, underscoring the ongoing challenge of affordability,' says Chief Economist Danielle Hale.
wutzkoh –
Required income spikes vary widely across cities
Advertisement
Compared with pre-pandemic levels, the income needed to buy a home has significantly increased in many areas across the U.S., with three metros in particular seeing the steepest spikes as of April 2025.
Memphis, TN, topped the list, with a massive 94.8% surge in required annual income over the past six years.
A person looking to buy a home in Memphis with a median price of $345,495 in April would have to earn $91,330 a year.
4 The typical household earned approximately 41% less than the recommended income, according to the U.S. Census Bureau.
Pormezz –
Advertisement
Providence, RI, came in second, with the required income to buy a typical home there for $584,900 soaring by nearly 93% from April 2019, climbing to $154,615.
Las Vegas ended up in the No. 3 spot, with the household income needed to afford a typical $475,000 house jumping 86.5% over the past six years, to $125,564 annually.
Among the 50 largest metropolitan areas analyzed as part of the inventory report, three saw the smallest increases in required income, with the ever-affordable Detroit in the lead, with a modest 25.8% boost compared with April 2019.
4 Memphis, Providence and Las Vegas saw the steepest spikes in income needed to buy a home as of April 2025.
seanlockephotography –
Put simply, a family looking to buy a median-priced home for $253,575 in the Motor City would require an annual income of about $67,000.
San Francisco has experienced the second-smallest spike in required income, at 30.5%, since 2019, but that's little comfort considering that the typical home in the ultraexpensive tech hub costs $995,000, more than double the national median.
A household needs at least $263,000 annually to afford it.
Advertisement
Chicago saw the third-lowest uptick in required income, up 36.4% compared with April 2016.
That means that a family earning $98,455 per year in the Windy City can afford a home with the median price of $372,450.
