U.S. Households Now Need 70% More Income To Buy A Home—Double Whammy Of Skyrocketing Prices And Rates Puts Homeownership Out Of Reach For Many

As if you needed proof of the housing crisis facing many Americans, a new report by Realtor.com reveals that the income required to buy a home has soared by a mighty 70% since spring 2019.

According to the Realtor.com April 2025 Housing Market Trends Report, the household income needed to buy a home has increased by $47,000. This means that if a buyer wished to purchase a home at April’s national median list price of $431,250, they would need to earn an annual income of $114,000, buy with a 30-year mortgage, and make a 20% down payment, according to Realtor.com. 

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Homeowners Need To Make A Minimum Of $9,500 Per Month

The numbers factor in the homeowner not spending more than 30% of their gross income on their housing costs, which would account for their mortgage payment, taxes, and insurance. It effectively puts many middle-class workers out of the home-buying pool because an owner would need to make around $9,500 a month before taxes to cover their housing expenses.

According to the  U.S. Census Bureau, a typical American household earned just over $80,600 per year, in 2023, over 40% less than the figure needed to buy a home today.

“While the income needed to purchase a home has leveled off nationally over the past year, it remains significantly higher than before the [COVID-19] pandemic, underscoring the ongoing challenge of affordability even as market conditions gradually rebalance,” Realtor.com Chief Economist Danielle Hale said.

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National Income Spikes

According to Realtor.com data, the income needed to buy a home varies dramatically across the nation and spiked in some cities more than others since 2019. 

Memphis, Tennessee, has seen the greatest required salary spike of 94.8%. It means a potential buyer of an averagely priced home of $345,495 would need to make $91,300 a year. 

Providence, Rhode Island, was next, requiring a salary of $154,615 to buy a home costing $584,900 — a 93% increase,

In third place was Las Vegas, which required an income of $125,654 to buy a home costing $475,000 — an 86.5% increase.

The Cost Of Living And Tariffs

These numbers do not reflect the cost of living, which, according to the Bureau of Labor Statistics has decreased by 2.4% over the last year. However, the potential impact of tariffs remains to be seen.

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For potential would-be buyers looking to purchase a new home, tariffs could increase new home prices by $10,000, Usha Haley, professor of international business and management at the Wichita State University Barton School of Business told U.S. News & Wold Report, “not including potential delays and supply chain disruptions,” she added.

“Shifting gears to domestic products for construction is possible, but will take time. The United States has over 300 billion trees, but not the industrial capacity to meet housing demand within the next couple of years,” Haley said.

Interest Rates

Interest rates are the big unknown. If they dropped, the amount homeowners would need to earn would also fall. However, as tariffs begin to bite, that does not seem on the cards, according to media reports, despite President Donald Trump‘s pressuring of the Federal Reserve to lower rates.

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