How Much You Need to Earn to Buy a Home in 49 Major US Cities

For many Americans, the dream of owning a home is becoming increasingly difficult to achieve. Pay packets are rising across the country, yet property prices continue to move faster. In dozens of major US cities, even households earning well above the national average are finding themselves locked out of the housing market.

New data from real estate company Redfin shows that households now need an annual income of roughly $116,780 to afford the average American home. That figure remains nearly $30,000 higher than the current US median household income, which stands at about $88,000 according to government data cited by CBS News. The figures underline the growing pressure facing aspiring homeowners across the country.

Rising Wages Are Still Not Enough

There has been some improvement in affordability over recent months. Wages have increased by around 4% this year, while mortgage rates have eased slightly compared with last year's highs. However, economists say the relief remains limited after years of soaring house prices.

The average home in the US now costs close to $418,000, according to the National Association of Realtors. Redfin found that a household earning the national median income would need to spend around 40% of its earnings on a median-priced property. Financial advisers generally recommend keeping housing costs below 30% of annual income after making a 15% deposit.

Nancy Vanden Houten, lead US economist at Oxford Economics, said affordability pressures are expected to continue for years. In a client note, she said homebuying in the US remains unaffordable and is likely to stay that way over the next decade. The affordability crisis is particularly severe in large coastal cities where housing demand continues to outpace supply.

Silicon Valley Remains Out of Reach

San Francisco remains the most expensive city for homebuyers among the major metro areas analysed by Redfin. The report found that households there would need to earn nearly $444,000 a year to afford a home. That is more than five times the national median household income.

The city's housing shortage has intensified as technology companies continue expanding their artificial intelligence operations across Silicon Valley. Redfin noted that increased demand from highly paid tech workers has continued pushing prices higher. In March, the median sales price for a home in San Francisco reached approximately $1.7 million.

Nearby San Jose also remains heavily unaffordable. Buyers there need an estimated annual income of around $426,000 to purchase a home. Other major cities such as Los Angeles, New York, and Washington DC also continue to present steep barriers for middle-income households. For younger workers and first-time buyers, the numbers have become increasingly discouraging. Many are delaying long-term financial decisions because homeownership feels further away than ever before.

Midwest Cities Offer a Different Picture

While many housing markets remain expensive, several Midwestern cities continue to offer comparatively affordable paths to homeownership. Redfin identified eight major cities where earning around the national median income is still enough to afford a home.

Detroit ranked among the most affordable. Households there need an annual income of roughly $56,219 to buy a property. That figure is below both the city's median income and the overall national average. Other cities where homes remain relatively affordable include Cleveland, Pittsburgh, St Louis, Philadelphia, Cincinnati, Indianapolis, and Warren in Michigan.

Lower house prices in these cities have attracted growing interest from buyers seeking cheaper living costs and more financial stability. However, economists warn that affordability could tighten in these areas if migration from more expensive regions continues to increase.

Americans Feel the Housing Market Has Changed

The affordability crisis is also shaping public opinion across the country. A CBS News poll conducted in February found that more than eight in 10 Americans believe buying a home today is harder than it was for earlier generations. The findings reflect broader concerns about the growing divide between wages and living costs in the modern US economy.

Oxford Economics also noted that more than twice as many Americans now live in states with the highest home price-to-income ratios compared with states where housing remains more affordable. Although housing conditions have improved slightly in recent months, experts say meaningful change will likely depend on increasing the supply of homes across the country. For millions of Americans, the traditional belief that stable work naturally leads to homeownership is beginning to feel increasingly uncertain.