US Homebuyers Need Slightly Lower Salary Than Last Year

The annual salary needed to purchase a median-priced U.S. home fell slightly in June compared to the previous year, but it still represents a substantial financial hurdle for many households. Buyers would have needed an income of $109,796 to afford the typical home, a marginal decrease from the record $110,382 seen last year, according to Redfin.

A home is considered affordable if a mortgage-paying buyer dedicates 30% or less of their income to monthly housing costs. While the required income has remained relatively stable year-over-year due to corresponding increases in both housing costs and general incomes, the gap persists. Redfin economist Yingqi Xu noted that despite a downward trend since late 2025, the necessary income still exceeds the typical U.S. household's earnings of $87,599 by over $22,000.

However, the market shows signs of improved accessibility for first-time homebuyers. The income needed for a starter home has declined by 1.5% over the past year, reaching $70,693. This marks the eighth consecutive month of improving affordability for entry-level properties, suggesting a more manageable market for those starting out, though compromises may still be necessary.

Across major U.S. metropolitan areas, affordability is improving in over half of the markets analyzed by Redfin. This includes once-hot markets like Nashville and Austin, which are now seeing more buyer options and negotiating power. While some high-cost areas like Seattle and San Jose are also experiencing affordability gains, only a few areas, such as St. Louis and Pittsburgh, have typical household incomes exceeding what's needed for the median home.