The dream of owning a home in America is becoming increasingly out of reach . In most states, a six-figure income is needed to afford an average-priced home. Nationally, homeowners must now earn $116,986 to afford a typical home. That’s an increase of 50 percent from $78,236 in 2020, according to Bankrate’s Housing Affordability Study.
The study analyzed home sale prices to calculate monthly mortgage payments for every state and the District of Columbia — and worked out what annual salary would be needed to cover that. The lowest income required was under $65,000, with the highest at $240,000. Since January 2020, the income needed to afford a typical home has risen due to higher mortgage rates. In some areas, pandemic-driven migration has further fueled price increases.
Homeowners from California and Seattle flooded into Mountain and West states, while those in Northeast hubs like Boston and New York relocated to Florida , the Carolinas and Tennessee . The national median price for a home has also increased by 20 percent in the last five years, rising from $349,750 in 2020 to $418,489 this year, according to Bankrate’s analysis of Redfin data.
As of January 2025, there are 30 states where Americans need a household income of more than $100,000 annually to afford a typical home. For residents in eight states and the District of Columbia it was $150,000 or more, with three states requiring $200,000 or more. In the District of Columbia, an income of $240,009 was needed to buy a home in 2025. Hawaii was close behind, with a $235,638 income needed. California is third with a $213,447 income needed.
In Massachusetts a person will need a $174,392 income and Colorado was fifth highest with an income of $168,643 needed to buy a typical home. The top five states where the household income needed to afford a typical home grew the most since 2020 are Utah (up 89.4 percent), Montana (up 84.6 percent), Wyoming (up 79 percent), Maine (up 77.4 percent), and Tennessee (up 76.9 percent). ‘These numbers show the dramatic rise in home prices over the past five years, and the tightening affordability squeeze facing first-time buyers,’ said Bankrate housing market analyst Jeff Ostrowski.
‘For many buyers, homeownership feels like it’s moving farther out of reach. ‘Unfortunately for buyers, it seems unlikely that either home prices or mortgage rates will fall dramatically in the near future.’ Overall, residents in the Northeast and the West need the most income to afford a median-priced home in 2025, while residents in the Midwest and South need the least.
In West Virginia, the income needed to afford a home is $64,179. In Iowa it’s $70,437. In Ohio the income needed is $71,080, while in Mississippi it’s $72,072. Indiana also landed in the bottom five with an income of $72,342 needed to afford a home.
The top five states where the household income needed to afford a home grew the least since 2020 are Texas (up 25.8 percent), Louisiana (up 26 percent), Kansas (up 31.1 percent), North Dakota (up 33.6 percent) and Illinois (up 35.2 percent).
‘These numbers really underscore the wide gaps in housing affordability throughout the country,’ said Ostrowski. ‘There are many affordable housing markets in the Midwest and South, and many very unaffordable markets along the coasts.
‘If you’re not ready to buy, there’s no shame in renting. Use your time as a renter to improve your credit score, bolster your down payment fund and research down payment assistance options.’ To complete the study, Bankrate accessed Redfin’s median sale price data from January 2020 and January 2025 on February 13. Bankrate calculated monthly mortgage payments for every state, the District of Columbia and the US as a whole.
Monthly mortgage payments for 2025 for all 50 states and the District of Columbia were calculated assuming a 20 percent down payment and no HOA fees or PMI (private mortgage insurance). Bankrate also used the 52-week average interest rate for a 30-year fixed mortgage for the analysis, 2023 average state property taxes, and 2025 average homeowners insurance rates. The average rate for a 30-year fixed mortgage interest rate over 52 weeks was 6.92 percent as of the week of February 1.
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