U.S. workers have seen wages rise by roughly 4% this year, with median household income reaching about $88,000 in April, according to government data. However, this increase is still far below what is needed to afford a typical home in most American cities.
A recent report from real estate company Redfin estimates that households now need an annual income of about $116,780 to comfortably afford the average-priced home in the United States. That figure is slightly lower than the peak of around $122,000 recorded in mid-2025, but affordability remains a major challenge nationwide. The median home price in the U.S. is currently close to $418,000, according to the National Association of Realtors.
Financial experts typically recommend that housing costs should not exceed 30% of a household’s income. However, Redfin found that the average U.S. household would need to spend around 40% of its income to afford a median-priced home, highlighting the growing gap between wages and housing costs.
Major affordability gaps across cities
In most large U.S. cities, the income required to buy a home is significantly higher than the national median salary. Redfin data shows that in 41 of the 49 largest cities, the typical household income is not enough to afford a home.
The most expensive markets are located in California’s tech hubs. In San Francisco, buyers need to earn nearly $444,000 per year to afford a home, driven by limited housing supply and strong demand linked to the technology sector. In nearby San Jose, the required income is about $426,000.
Cities where homeownership is more affordable
There are a few exceptions where median income is sufficient to buy a home. These include several cities in the Midwest and Northeast, such as:
- Detroit, Michigan
- Cleveland, Ohio
- Pittsburgh, Pennsylvania
- St. Louis, Missouri
- Philadelphia, Pennsylvania
- Cincinnati, Ohio
- Indianapolis, Indiana
- Warren, Michigan
In these cities, home prices remain closer to or even below local income levels, making ownership more accessible.
A continuing affordability crisis
Although housing affordability has improved slightly in recent months due to slower home price growth and easing mortgage rates, experts say the market remains out of reach for many Americans.
Surveys show that more than 80% of Americans believe it is harder to buy a home today than it was for previous generations. Economists warn that high prices combined with elevated interest rates will continue to pressure affordability in the coming years, especially in high-demand metropolitan areas.
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