Redfin: Income Needed to Afford Typical American House Near Record High

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Redfin, Seattle, reported that Americans need to earn $109,796 to afford the typical U.S. home for sale, down narrowly from the all-time high of $110,382 a year ago.

Redfin defines a house as affordable if a buyer taking out a mortgage would spend no more than 30% of their income on their monthly housing payment, assuming factors such as a 15% down payment.

House prices and income have tracked closely, rendering homebuying affordability nearly flat. The median U.S. home sale price increased 2.2% year-over-year in June, with a slight decrease to the average mortgage rate. Simultaneously, the median household income was up 4% year-over-year to $87,599.

The income required to afford a home is still $22,197 higher than the typical U.S. household income of $87,599.

However, that gap has improved. One year ago, the distance was $26,125. In 2024, it was $28,834. Incomes are growing just a bit faster than home prices, overall. The typical homebuyer would need to spend 37.6% of their income to buy the median-priced U.S. home, down from 39.3% a year earlier.

And, the share of home listings that are deemed “affordable”–meaning they require no more than 30% of income spent on housing–has increased over the past year to 34.2%. That’s up from 30.5% a year earlier.

“The earnings needed to buy a house have stabilized after several years of deterioration, but that doesn’t mean homes are affordable to the average American,” said Redfin Senior Economist Yingqi Xu. “There’s still a double-digit gap between what the typical household earns and what they need to comfortably buy a home, leaving many prospective first-time buyers stalled on the sidelines. But even if the market isn’t becoming much more affordable, it is becoming a bit more manageable for house hunters. It’s a buyer’s market in most of the country, especially places that were once pandemic homebuying hotspots like Nashville and Austin, giving buyers lots of options to choose from and strong negotiating power.”