Experts Reveal U.S. Households Now Need to Earn 70% MORE to Afford a Home

For potential homebuyers waiting on the sidelines for the right time to buy a house, some discouraging news just dropped: A U.S. household now needs to earn $114,000 a year to afford a median-priced home. That’s up 70.1 percent from $67,000 just six years ago, according to the numbers crunched by the Realtor.com April Housing Trends Report.

In some areas, including several California markets, the income needed has climbed even faster. For example, one sharp-rising metro is the Boston-Cambridge-Newton area—which includes parts of Massachusetts and New Hampshire—where households now need to make $232,095 annually to afford a median-priced home, an increase of 82 percent since 2019.

In recent years, homebuyers have faced a double-whammy in terms of both home prices and mortgage interest rates increasing, which, for some, has pushed the reality of homebuying even further out of reach. In some cases, first-time buyers are relying on down payment gifts from family or on their parents to buy or finance their homes for them.

Ahead, we're breaking down exactly what's going on and if there are any silver linings to this situation.

What’s Driving Up the Cost of Home Ownership?

According to Realtor.com, the median listing price of U.S. homes in April 2025 was $431,250, an increase of about 37 percent from April 2019, when the median price was $314,950.

To calculate the household income needed to afford a home, analysts in this instance assume a 30-year, fixed-rate mortgage (the most common loan type), a 20 percent down payment, and that no more than 30 percent of gross monthly income is spent on housing.

The widening gap we’re witnessing between 2019 and today is fueled by “a combination of rapid home price appreciation and elevated mortgage rates,” according to Realtor.com.

There are a few key reasons why homebuying has become so much more expensive in recent years, Jake Krimmel, a senior economist at Realtor.com, tells House Beautiful. As remote work expanded during the pandemic, he says, buyers wanted more space, including home offices and bigger yards, which drove up demand. At the same time, low interest rates and strong labor and stock markets gave households more purchasing power, pushing home prices sharply higher, he says.

Rising mortgage rates are also at play, he says, because since 2022, borrowing costs have jumped. A $400,000 mortgage at three percent has a monthly payment of around $1,700, but at six percent, that jumps to $2,400—a 40 percent increase in cost just from interest rates.

“Many homeowners locked in low rates before 2022 and are reluctant to sell, keeping supply tight,” Krimmel says. “With demand still strong and few homes on the market, prices remain high, despite high and rising rates.”

On top of all that, there are higher ancillary costs, with property taxes, insurance, and HOA fees adding to the overall cost of owning a home, he says.

Which Markets Have Increased the Most?

Here are the markets with the highest required household income to buy a median-priced home in the area.

1. San Jose-Sunnyvale-Santa Clara, California: $370,069, up 54.3 percent since April 2009
2. Los Angeles-Long Beach-Anaheim, California: $315,892, up 86 percent since April 2009
3. San Francisco-Oakland-Fremont, California: $263,023, up 30.5 percent since April 2009
4. San Diego-Chula Vista-Carlsbad, California: $258,926, up 73.4 percent since April 2009
5. Boston-Cambridge-Newton, Massachusetts and New Hampshire: $232,095 up 81.9 percent since April 2009
6. New York-Newark-Jersey City, New York and New Jersey: $208,687, up 69.4 percent since April 2009
7. Seattle-Tacoma-Bellevue, Washington: $206,777, up 54.9 percent since April 2009
8. Sacramento-Roseville-Folsom, California: $167,481, up 61.7 percent since April 2009
9. Washington-Arlington-Alexandria, in Washington, D.C., Virginia, Maryland, and West Virginia: $164,682, up 59.1 percent from April 2009
10. Denver-Aurora-Centennial, Colorado: $158,462, up 42.2 percent since April 2009

Are There Any Silver Linings for Buyers?

Home buying has become significantly more expensive, but there are some signs that the market may swing in the favor of buyers, analysts say.

Inventory is climbing and more sellers are adjusting their prices, so in some markets, you may see price cuts on listed homes, explains Danielle Hale, Chief Economist at Realtor.com. A recent rise in mortgage rates is likely behind a buyer slowdown. In April, nearly one in five listings had price reductions, which is a silver lining for buyers looking to negotiate.

In this expensive housing market, Krimmel has a few tips:

• Think starter home, not forever home: “Focus on what you can afford now—think smaller square footage or a broader search area,” he says.
• Get pre-approved and budget smart: Your quoted rate can vary based on credit, down payment, and more. Know your full budget—including taxes, insurance, and maintenance—before you begin your search.
• Don’t bank on falling rates: Buy a home you can afford today, Krimmel says. While refinancing later is possible, there's no guarantee rates will drop soon—or significantly. Plan for a “higher for longer” interest rate environment, he suggests.