August 10, 2026
Americans Still Need Nearly $110K To Afford The Typical Home
Typical households still earn about $22,200 less than what is needed.
Americans still need to earn nearly $110,000 a year to comfortably afford the typical home for sale, highlighting the persistent affordability challenges facing prospective buyers despite modest improvements in the housing market, USA Today reports.
According to a Redfin analysis, a household needed an annual income of $109,796 in June 2026 to purchase a median-priced U.S. home while spending no more than 30% of its income on housing costs. The figure is just 0.5% below the record-high $110,382 reported a year earlier, suggesting homebuying costs have largely stabilized after several years of worsening affordability.
Household earnings have continued to climb, helping narrow the affordability gap. Redfin estimated the median U.S. household earned $87,599 in June, a 4% increase from the previous year, while the median home sale price rose 2.2%. Mortgage rates also eased slightly but remained in the mid-6% range, continuing to keep monthly borrowing costs elevated.
Even with rising incomes, the typical household still earns about $22,200 less than what is needed to comfortably purchase a median-priced home. That shortfall has improved from roughly $26,100 a year ago and nearly $28,900 two years earlier, but it continues to price many Americans—particularly first-time buyers—out of the market.
“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,” Redfin Senior Economist Yingqi Xu said. Xu added that buyers have gained negotiating power in many parts of the country as inventory has increased, creating a more favorable market for shoppers. Still, many households remain unable to meet the income needed to purchase a home without stretching their finances.
Redfin defines an affordable home as one in which a buyer making a 15% down payment spends no more than 30% of their monthly income on mortgage payments, property taxes, and other housing-related expenses.
Based on that benchmark, buyers would need to devote 37.6% of their income to purchase the median-priced home, down from 39.3% a year earlier.
The analysis also found that 34.2% of homes listed for sale in June were affordable for households earning the national median income, up from 30.5% a year earlier. However, affordability remains well below pre-2022 levels, when more than half of homes on the market were within reach of the typical household.
Among the 46 major metropolitan areas Redfin examined, affordability improved in 24 markets. Seattle recorded the largest improvement as declining home prices reduced the income needed to purchase the typical home, while San Jose and Portland also posted notable gains.
Despite those improvements, many high-cost markets remain financially out of reach. San Francisco remained the nation’s least affordable major metro area, where buyers would need an annual income of $453,205 to afford the typical home. Redfin found that only St. Louis, Indianapolis, and Pittsburgh had median household incomes that exceeded the income required to purchase a typical home in their local markets.
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