Homebuyers Must Earn $115,000 to Afford the Typical U.S. Home. That’s About $40,000 More Than the Typical American Household Earns.

Sky-high mortgage rates and still-rising home prices have made it harder than ever to afford a home, especially for first-time buyers. The typical buyer needs to earn 15% more than they did a year ago–and wages are only up 5%.

It’s harder than ever for Americans to afford a home.

A homebuyer must earn $114,627 to afford the median-priced U.S. home, up 15% ($15,285) from a year ago and up more than 50% since the start of the pandemic. That’s the highest annual income necessary to afford a home on record.

This is based on a Redfin analysis that compares median monthly mortgage payments for homebuyers in August 2023 and August 2022. The national income data in this analysis is adjusted for inflation. See the bottom of this report for more on methodology.

Housing costs are higher than ever because of the one-two punch of sky-high mortgage rates and rising home prices. The average rate on a 30-year fixed mortgage was 7.07% in August. Mortgage rates have climbed even higher since then, hitting 7.57% during the week ending October 12–their highest level in over two decades. But even though soaring mortgage rates have dampened demand, low inventory is causing home prices to increase. The typical U.S. home sold for about $420,000 in August, up 3% year over year and just about $12,000 shy of the all-time high hit in mid-2022.

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