There’s good news and not-so-good news for prospective homebuyers: The amount of income needed to afford a typical American home is down slightly from last year—but it’s still well above what many households earn.
To purchase the median-priced U.S. home on the market in June, Americans would need an annual income of $109,796, down slightly from last year’s record high of $110,382, according to a new report from Redfin. The Seattle-based real estate site deems a home affordable if a buyer taking out a mortgage will spend 30% or less of their income on their monthly housing costs.
The income required to afford a home is essentially unchanged from a year ago because monthly housing costs and incomes are increasing at a similar rate. But even though the income needed to afford a home has consistently dropped since October 2025, that doesn’t mean homes are affordable to the average American, notes Yingqi Xu, a senior economist with Redfin.
“There’s still a double-digit gap between what the typical household earns and what they need to comfortably buy a home, leaving many prospective first-time buyers stalled on the sidelines,” Xu said in a statement.
That’s because the income needed to afford a typical home on the market is more than $22,000 higher than the $87,599 earnings for a typical U.S. household. Homeownership remains out of reach for so many Americans because they would need to devote significantly more of their income to afford housing—to the tune of 38%, well above the 30% rule of thumb threshold.
GOOD NEWS FOR FIRST-TIME BUYERS
But there are signs that buying a home is becoming somewhat more attainable—and particularly for first-time buyers. A separate report from Redfin found that Americans need to earn $70,693 to afford the typical U.S. starter home, which is down 1.5% from a year ago and marks eight straight months of improvements in starter-home affordability.
“Affordability has improved modestly for entry-level buyers, but starter homes come with tradeoffs, and finding the right one is a challenge,” Xu said in a statement.
Even so, prospective first-time homebuyers at least have options: Redfin deemed that every single starter-home listing in almost half of the biggest U.S. metro areas is considered affordable.
LOCATION MATTERS
More broadly, there are additional reasons to be optimistic about the housing market. Redfin economists have termed 2026 “the great housing reset” and have predicted that housing affordability could continue to improve by the end of the year.
Redfin’s latest research found that 34% of U.S. home listings were considered affordable to someone earning the median income in June, up from 30.5% a year earlier. And Xu notes that the housing market has become “a bit more manageable” for people who are house hunting—though location obviously matters.
“It’s a buyer’s market in most of the country, especially places that were once pandemic homebuying hotspots like Nashville and Austin, giving buyers lots of options to choose from and strong negotiating power,” he said.
In both Nashville and Austin, the income required to afford a typical home on the market in June has declined in the past year, though many buyers would need to devote more than 30% of their income to housing costs in both locations.
WHERE HOMES ARE MOST AFFORDABLE
Affordability is improving in more than half of the 46 U.S. metro areas that Redfin analyzed—including in high-cost markets like Seattle, San Jose, and Portland, Oregon.
In only three major metro areas—St. Louis, Indianapolis, and Pittsburgh—the typical household earns more than what’s required to afford a home. That said, homebuying is getting less affordable in Pittsburgh, which saw the biggest increase in the income homebuyers needed to afford the median-priced home in June.
Even so, Pittsburgh is among six metro areas where housing costs are close to, if not below, that 30% threshold and where more than 50% of listings are affordable for a median-earning household:
- Detroit
- St. Louis
- Pittsburgh
- Indianapolis
- Baltimore
- Cleveland