To Afford a Median-Priced Home, US Homebuyer Must Earn 15% More Than a Year Ago

The average US home buyer must earn $114,627 to afford a median-priced home, Redfin reported on Tuesday (10-17-23). That is up 15%, or $15,285, from a year ago, up more than 50% since the start of the pandemic, and highest income necessary on record.

Redfin notes that according to its data, the typical US household earns about $40,000 less than the income needed. The median household income was approximately $75,000 in 2022, the most recent year for which annual income data is available. Hourly wages have risen 5% over the last year, but that is not nearly as fast as the necessary income.

Commenting on the report, Redfin Economic Research Lead Chen Zhao said:

“In a homebuyer’s ideal world, rising mortgage rates would push demand and home prices down enough to make up for high interest payments. But that’s not what’s happening now: Although new listings are ticking up slightly, inventory is still near record lows as homeowners hang onto their low mortgage rates—and that’s propping up prices. Buyers—particularly first-timers who are committed to getting into a home now—should think outside the box. Consider a condo or townhouse, which are less expensive than a single-family home, and/or consider moving to a more affordable part of the country, or a more affordable suburb.”