- The income needed to afford the typical U.S. home has fallen year over year in almost a dozen major metros, most of which are Sun Belt boomtowns that have seen a drop in home prices amid surging inventory.
- Nationwide, the typical homebuyer needs to earn $112,131 per year to afford the median priced home—roughly $25,000 more than the typical household makes.
Homebuyers need to earn $112,131 per year to afford the $447,035 median priced U.S. home, little changed (+0.5%) from a year ago. But in 11 of the 50 most populous U.S. metropolitan areas, the income needed to afford a home has declined.
In Oakland, CA, homebuyers need to earn $244,073 to afford the typical home. While that’s high compared to most places, it’s down 4.6% year over year—the largest decline among the 50 most populous U.S. metropolitan areas. Next come West Palm Beach, FL (-3.7%), Jacksonville, FL (-3.5%), San Diego (-3.2%), Tampa, FL (-2.1%), Atlanta (-2%), Phoenix (-1.8%), St. Louis (-1%), Orlando, FL (-0.7%), Sacramento, CA (-0.4%) and Dallas (-0.2%).
This is according to a Redfin analysis of MLS median home sale price data as of June 2025, along with prevailing mortgage rates and property-tax payments. We consider a home affordable if a buyer taking out a mortgage spends no more than 30% of their income on their monthly housing payment.
The income needed to afford a home is falling in the aforementioned 11 metros because home prices are falling. In Oakland, for example, the median home sale price fell 4.6% year over year in June—the largest decline among the top 50 metros. Next came West Palm Beach (-4.1%) and Jacksonville (-3.9%).
The majority of these 11 metros are in Sun Belt states that exploded in popularity and price during the pandemic and are now seeing home prices come back down to earth. Many pandemic boomtowns ramped up construction to accommodate newcomers, leading to an influx of supply that put downward pressure on home prices.
“Buyers are battling affordability and they see a lot of listings sitting on the market, so they’re asking for major concessions,” said Katie Shook, a Redfin Premier real estate agent in Phoenix. “We’ve been in a buyer’s market for the past eight months. If your home isn’t in 10/10 condition and priced at or below market value, it’s going to linger on the market. A lot of sellers are offering $10,000-$15,000 to cover the buyer’s closing costs to seal the deal. Some home features, like a landscaped backyard or pool, aren’t getting the return they used to. Buyers are no longer willing to pay a premium for those things.”
Four of the 11 metros where the income needed to afford a home is falling are in Florida, which has also seen home prices drop amid soaring insurance and HOA costs, along with intensifying natural disasters.
While homebuying has become more affordable in some parts of the country, the typical household still earns far less than it needs to afford the typical home; the typical U.S. household earns an estimated $86,258—roughly $25,000 less than the income required to afford the typical home for sale.
Affordable Midwest Metros See Biggest Jump in Income Needed to Buy a Home
America’s most affordable places are seeing the biggest jumps in the income needed to afford a home—likely in part because their low cost of living has attracted homebuyers, pushing up prices.
In Detroit, the income needed to afford a home is up 9.9% year over year, the biggest increase among the top 50 metros. But it’s still only at $57,432—the lowest in the country. That’s because even though Detroit’s median sale price is up 8.6% year over year—the second biggest increase in the nation—it remains the lowest in the country ($215,000).
Cleveland saw the second biggest increase in the income needed to afford a home (+8.2% year over year), followed by Newark, NJ (+6.8%), Chicago (+6.7%) and Pittsburgh (+5.7%).
The Typical U.S. Homebuyer Spends 39% of Their Income on Housing
While a rule of thumb in personal finance is to spend no more than 30% of income on housing, that has become less realistic as housing costs have climbed.
A household on the median income would need to spend 39% of their earnings on housing to buy the median priced home. But there’s some good news: That’s down from 40.5% last year, likely because incomes have risen while home prices have barely budged (the median U.S. home sale price is up just 1% year over year).
While only about one-third (34.6%) of home listings are affordable for the typical U.S. household, that’s up slightly from 33.2% a year ago.
June 2025 Metro-Level Summary: 50 Most Populous U.S. Metros
| U.S. metro area | Income needed to afford median priced home | Income needed to afford median priced home, Y/Y change | Share of home listings affordable to household earning median estimated income | Share of income typical household would need to spend to buy median priced home | Median sale price | Median sale price, Y/Y change |
|---|---|---|---|---|---|---|
| Anaheim, CA | $302,587 | 2.9% | 5.0% | 72.7% | $1,245,000 | 3.8% |
| Atlanta, GA | $103,719 | -2.0% | 41.7% | 32.3% | $407,500 | -3.0% |
| Austin, TX | $130,324 | 0.7% | 22.3% | 36.4% | $449,945 | 0.0% |
| Baltimore, MD | $108,802 | 3.0% | 55.9% | 29.4% | $424,995 | 3.7% |
| Boston, MA | $204,465 | 3.0% | 10.5% | 49.1% | $799,000 | 3.7% |
| Charlotte, NC | $104,443 | 1.3% | 33.3% | 35.2% | $426,415 | 1.8% |
| Chicago, IL | $112,828 | 6.7% | 41.6% | 34.6% | $385,000 | 2.7% |
| Cincinnati, OH | $81,968 | 5.4% | 53.8% | 27.9% | $315,000 | 5.0% |
| Cleveland, OH | $72,538 | 8.2% | 56.9% | 28.3% | $264,900 | 8.1% |
| Columbus, OH | $96,209 | 3.7% | 41.9% | 32.0% | $368,000 | 5.1% |
| Dallas, TX | $120,542 | -0.2% | 26.0% | 35.8% | $425,000 | -1.2% |
| Denver, CO | $147,742 | 0.0% | 26.1% | 38.9% | $604,771 | 0.8% |
| Detroit, MI | $57,432 | 9.9% | 68.3% | 26.4% | $215,000 | 8.6% |
| Fort Lauderdale, FL | $124,627 | 0.9% | 35.3% | 45.7% | $480,000 | 1.0% |
| Fort Worth, TX | $104,124 | 0.5% | 25.9% | 34.1% | $365,000 | 0.0% |
| Houston, TX | $99,655 | 0.3% | 33.8% | 33.2% | $346,000 | -0.9% |
| Indianapolis, IN | $82,766 | 1.5% | 56.2% | 27.9% | $325,000 | 1.6% |
| Jacksonville, FL | $94,618 | -3.5% | 35.9% | 32.8% | $370,000 | -3.9% |
| Kansas City, MO | $92,424 | 1.9% | 48.4% | 30.2% | $359,900 | 2.8% |
| Las Vegas, NV | $108,227 | 0.3% | 19.8% | 40.0% | $449,900 | 0.9% |
| Los Angeles, CA | $234,619 | 2.0% | 1.1% | 73.0% | $950,000 | 2.7% |
| Miami, FL | $146,476 | 3.8% | 10.7% | 58.2% | $575,000 | 4.0% |
| Milwaukee, WI | $96,671 | 4.6% | 40.5% | 33.8% | $367,000 | 4.7% |
| Minneapolis, MN | $105,206 | 2.6% | 49.7% | 29.1% | $405,000 | 3.3% |
| Montgomery County, PA | $138,478 | 2.7% | 39.9% | 33.0% | $525,000 | 3.5% |
| Nashville, TN | $115,992 | 1.2% | 25.9% | 36.9% | $485,000 | 2.1% |
| Nassau County, NY | $207,386 | 5.2% | 12.4% | 41.8% | $745,000 | 6.4% |
| New Brunswick, NJ | $158,640 | 3.7% | 24.1% | 39.2% | $575,000 | 4.6% |
| New York, NY | $213,245 | 4.6% | 8.2% | 64.9% | $810,000 | 5.9% |
| Newark, NJ | $186,124 | 6.8% | 14.3% | 50.0% | $670,000 | 8.9% |
| Oakland, CA | $244,073 | -4.6% | 13.1% | 52.9% | $968,444 | -4.6% |
| Orlando, FL | $104,644 | -0.7% | 23.5% | 37.7% | $410,000 | -1.1% |
| Philadelphia, PA | $82,329 | 4.5% | 50.0% | 33.0% | $320,000 | 5.9% |
| Phoenix, AZ | $109,719 | -1.8% | 25.6% | 35.3% | $459,925 | -1.1% |
| Pittsburgh, PA | $70,786 | 5.7% | 63.8% | 25.8% | $270,000 | 6.9% |
| Portland, OR | $147,029 | 1.8% | 17.6% | 42.4% | $579,000 | 2.5% |
| Providence, RI | $135,557 | 4.2% | 10.7% | 43.2% | $525,000 | 5.0% |
| Riverside, CA | $149,279 | 1.4% | 10.6% | 47.3% | $595,000 | 2.1% |
| Sacramento, CA | $150,939 | -0.4% | 10.2% | 43.6% | $600,000 | 0.0% |
| San Antonio, TX | $90,667 | 1.8% | 34.3% | 32.9% | $320,000 | 2.2% |
| San Diego, CA | $227,612 | -3.2% | 4.0% | 60.8% | $920,000 | -3.1% |
| San Francisco, CA | $393,443 | 0.9% | 7.7% | 72.5% | $1,600,000 | 1.6% |
| San Jose, CA | $413,100 | 3.9% | 9.0% | 71.4% | $1,687,500 | 4.8% |
| Seattle, WA | $219,498 | 1.8% | 14.1% | 50.7% | $874,975 | 2.9% |
| St. Louis, MO | $75,478 | -1.0% | 63.4% | 25.9% | $293,745 | -0.4% |
| Tampa, FL | $97,463 | -2.1% | 24.5% | 37.2% | $380,000 | -2.6% |
| Virginia Beach, VA | $95,217 | 2.7% | 42.0% | 31.5% | $377,000 | 3.3% |
| Warren, MI | $87,096 | 1.6% | 51.7% | 27.3% | $330,000 | 1.5% |
| Washington, D.C. | $155,308 | 2.0% | 42.8% | 33.3% | $610,000 | 2.5% |
| West Palm Beach, FL | $128,950 | -3.7% | 32.4% | 43.4% | $503,390 | -4.1% |
Methodology
We consider a home affordable if a buyer spends no more than 30% of their income on their housing payment. In this report, the word “homebuyer” refers to someone who is taking out a loan to finance their purchase.
The income needed to afford the typical home is calculated using the prevailing median home sale price and average mortgage-interest rate during the month of June, and assumes a 20% down payment. The typical housing payments noted in this report include the mortgage principal, interest, property taxes, homeowners’ insurance and mortgage insurance. The 2025 median household income is estimated using the U.S. Census Bureau’s (ACS) 2023 median household income and 12-month moving average nominal wage growth rates compiled from the Current Population Survey and reported by the Federal Reserve Bank of Atlanta.
