Income Over $100,000 Needed to Afford Typical Home, Bankrate Finds
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Bankrate, New York, released its 2025 Housing Affordability Study, finding that prospective homebuyers need an annual income of $116,986 to afford the typical U.S. home.
Bankrate defined the typical home as one priced at the median national sales price of $418,489 in January.
That’s a marked increased from 2020, when the income needed to buy a typical home was $78,236.
“Between elevated mortgage rates and the rise of home prices nationally to a record level, many aspiring homebuyers feel like owning a home is out of reach,” says Mark Hamrick, Senior Economic Analyst for Bankrate. “We can’t say when these conditions will ease, but we should note that home prices and availability widely vary around the nation and even throughout larger communities or metro areas. Some combination of patience and flexibility is called for.”
Homebuyers in 30 states, and the District of Columbia, need a six-figure household income to afford the typical home in their area, up from just six states plus the District of Columbia in 2020.
Homebuyers in the District of Columbia required the most income to afford a typical home in January 2025, at $240,009, followed by Hawaii at $235,638, California at $213,447, Massachusetts at $174,392 and Colorado at $168,643.
In terms of states that require the lowest income level to afford the typical home, buyers in West Virginia needed an income of only $64,179, followed by Iowa at $70,437, Ohio at $71,080, Mississippi at $72,072 and Indiana at $72,342.
Utah saw the largest surge in needed income over the past five years–up 89.4% to $151,956. Montana was No. 2, up by 84.6% to $142,316.
The income needed to afford a typical home increased the least in Texas from 2020, up only 25.8%.
Bankrate uses median home sales price data from Redfin, homeowners insurance data from Quadrant and property tax data from ATTOM to estimate monthly mortgage payments and draw conclusions about the homebuyer and the minimum income needed to afford the typical home.
