Redfin: Gap Between Income Needed for Buying vs. Renting Widens

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Redfin, Seattle, found that Americans need to earn $116,633 per year to afford the median priced home for sale, compared with $64,160 needed to afford the typical apartment for rent.

That’s 81.8% more needed for the homeowner; Redfin reports that gap has been widening. In 2024, an American needed to earn $110,808 to afford the typical home, compared with $64,000 for the renter–a gap of 73.1%. In 2023, the gap was 54.5%.

But, strikingly, in 2021, the buyer of a typical home needed to earn $63,925, just 17.3% more than $54,520 for the typical rental.

The typical U.S. household currently earns an estimated $86,382.

“It has become increasingly challenging for American renters to make the shift to homeownership thanks to the triple whammy of rising home prices, high mortgage rates and a shortage of houses for sale,” said Redfin Senior Economist Elijah de la Campa. “The gap between what someone must earn to buy versus rent may shrink in the coming months, but only because rents are expected to rise as the number of new apartments hitting the market tapers off due to a construction slowdown.”

The largest jump has been in Salt Lake City, where someone needs an income of $140,412 to afford the typical home for sale, 134% more than they need to afford the typical rental. That compares with 106% more than this time last year.

Austin, Texas, was up 24.6 percentage points to 143%, San Diego was up 21.7 percentage points to 127%, New York was up 20.7 percentage points to 76% and Los Angeles was up 20.7 percentage points to 141%. In many cases, this is due to asking rents falling while home prices continue to grow.

Some areas did see the gap narrow. In Cincinnati, someone needs an annual income of $80,752 to afford the typical home for sale, or 38.9% more than the typical rental. However, last February the gap was 47.7%.

Providence, R.I., Washington, D.C., Baltimore, Louisville, K.Y., and Sacramento, Calif., all saw their gaps shrink as well.