How much household income is needed to afford a home in the US? If you wanted to afford the median priced home it would take household income of $99,589 — with the median priced home priced at $417,600.
Income needed to afford a home in the US has decreased 9.55% yearoveryear while the median home price has increased in price from $407,100 to $416,700. How is this possible? The 30year fixed mortgage rate was 7.31% the year prior — compared to the current 30year fixed rate of 6.08%.
Table of contents
 Income to afford a home
 What impacts affordability?
 Calculation breakdown example
 Income needed in major cities
 Most expensive states
 Most affordable states
 Who is still able to afford a home?
Houshold income to afford a home purchase
Purchasing a home has become increasingly expensive with prospective homebuyers now needing to earn at least $100K to afford the median priced home in 18 states.
Here is the income it would take to afford a home on a statebystate basis:
What impacts home affordability?
Let's start by answering that question of what makes a home affordable? The general mortgage affordability rule is to not spend more than 28% of your gross monthly income on home costs — these home costs includes the principal, interest, property taxes and insurance.
Following this 28/36 rule you can take your estimated monthly mortgage payment divide it by 28% to see how much gross monthly income you would need to make. Further multiplying this amount by twelve would give you annual income needed for this home to be considered affordability.
Assumptions used in calculating the income in each state
For this calculation we started with the median home price in each state. The mortgage amount was calculated by applying a 20% down payment to the median home price. A 30year fixed mortgage rate of 6.08% was used which is the current mortgage rate. Since we used the 30year fixed mortgage rate — it was fitting to use 30 years as the amortization period. PITI was estimated as $66 for homeowners insurance and 0.07% of the property value for property tax.
Calculation breakdown example
You can start with your monthly mortgage payment from a mortgage calculator — and then follow the below breakdown to convert it to the annual income needed.
Let's use the monthly mortgage payment on the median priced home in the US which gives us a monthly payment amount of $2,324 as a starting point.

Annual Income Needed Calculation Breakdown
$2,324 monthly mortgage payment
/ 28% (28/36 rule)
= $8,299 monthly income needed
x 12 months
= $99,589 annual income needed
You can also see how much home you can afford by using a mortgage affordability calculator.
Read More: Income needed to afford a home in Canada
Income to afford a home in Major US cities
Here is how much income you would need to afford a home in some major cities.
City  Median Home Price  Income Needed 

New York  $820K  $193K 
Los Angeles  $1,005K  $236K 
Chicago  $364K  $87K 
Houston  $332K  $80K 
Phoenix  $450K  $107K 
Philadelphia  $275K  $67K 
San Antonio  $267K  $65K 
Dallas  $390K  $93K 
San Jose  $1,383K  $324K 
What are the most expensive states to purchase a home in?
California: $192,982
The states that requires the most household income to be considered affordable is California with a household income of $192,982 for the median priced home to be considered affordable.
Hawaii: $184,809
Hawaii is the second most expensive states when it comes to income needed to purchase a home. To afford the median priced home of $783,700 it would take household income of $184,809.
Washington: $152,253
Third on the list is Washington with income of $152,253 required to make the median home price affordable.
States with the least income needed to afford a home
Iowa: $58,744
The least income you would need to afford a median priced home in the US would be $58,744 — which would be to afford the median priced home in Iowa of $240,800.
Oklahoma: $61,298
Oklahoma is the second most affordable state with household income of $61,298 needed to afford the median priced home. Income needed in Oklahoma is $38,291 less than what it would take the purchase the overall median home in the US.
West Virginia: $61,043
To afford a home in West Virginia you would need to have a household income of $61,043. This would allow you to comfortably afford the median priced home.
Where are you still able to afford a home?
With the high cost of homes pair with high interest rates, home affordability is a concern in the US. However, there are still eleven states that are considered affordable when comparing the median income in each state to the monthly mortgage payment based on the 28/36 rule. These are the states and the percentage of monthly median income that would be spent on mortgage payments:
 Pennsylvania  28.49%
 Oklahoma  27.62%
 Kansas  27.02%
 Nebraska  26.92%
 Missouri  26.70%
 Michigan  26.64%
 Indiana  26.14%4
 Ohio  25.93%
 North Dakota  25.53%
 Illinois  25.34%
 Iowa  23.03%
Source: NAR