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According to a new survey by Bankrate, the average American household needs six figures to earn a home in 2025.
Bankrate’s housing affordability survey found that future U.S. home buyers need an annual household income of around $117,000 to buy a “typical home.” Researchers say that figure has risen by almost 50% since early 2020.
In 2020, only six state buyers and Washington, DC needed six figure income to buy a home. Well, that’s for more than 30 states.
According to the Bank Rate, the perpetrator is a number of factors, including a rise in mortgage rates and an overall rise in general home prices.
Bankrate researchers say it is the most challenging housing market in the United States in decades.
“We cannot say when these conditions will be eased, but we need to note that home prices and availability vary widely across the nation and across large communities and metro areas.” “Some combinations of perseverance and flexibility are required.”
This study focused on the median price, or the need for pre-tax income, as you can afford a “typical” home.
“We used median home selling price data from Redfin, homeowner insurance data from the quadrant, and property tax data from ATTOM to estimate monthly mortgage payments across 50 US states, the District of Columbia and nationwide,” Bankrate wrote on its website. “We assumed home buyers (for example, a 20% down payment) and got the minimum income needed to buy a typical home this year.”
A “sale” sign is on display in front of the Whistler Ridge Residential Community home at KB Home in Lake Forest, California on Monday, September 23, 2013 (Patrick Fallon/Bloomberg via Getty Images)
In states where homes are already considered expensive, household income required is even higher.
For example, in California, families need to build nearly twice as many households to meet the same standards.
California households need to make $213,447 to buy a typical state home. He is the third highest person behind only Washington DC and Hawaii.
The top five states that require the most income are:
District of Columbia: $240,009 Hawaii: $235,638 California: $213,447 Massachusetts: $174,392 Colorado: $168,643
Those looking to take root in other states may find their options even in 2025. States like Utah and Montana have seen significant increases in housing costs, with revenue requirements increasing by more than 80% in both states. Wyoming, Maine and Tennessee have also seen “needed income spikes” since 2020.
In some states, your money is still quite far away.
The top five states with low incomes are:
West Virginia: $64,179 Iowa: $70,437 Ohio: $71,080 Mississippi: $72,072 Indiana: $72,342
Bankrate has a list of tips for future home buyers, including using an affordable calculator to estimate payments. Monitor your credit score to see if there is a way to lower your borrowing rate, and see if you are eligible for down payment assistance, depending on your state.
For a complete list of Bankrate research results and expert suggestions, click here.
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