Homebuyers are gaining leverage — but the minimum income to buy is surging

The income needed to afford a median-priced home has skyrocketed since 2019, but some experts see potential opportunities on the horizon for prepared buyers.

Americans now need to earn $114,000 per year to afford a median-priced home.

That's an increase of 70.1% above the $67,000 required to afford that same mid-range home in 2019, according to data from Realtor.com. It's an increase driven by sky-high appreciation, persistent supply constraints, and stubbornly high interest rates, among other factors — and the dynamic continues to weigh heavily on the housing market, even as buyers gain leverage.

The data looked at median home prices each April for the past six years.

“Even with today’s affordability hurdles, meaningful changes in the market could give buyers a better shot at finding a home,” said Danielle Hale, chief economist at Realtor.com. “The number of homes for sale is rising in many markets, giving shoppers more choices than they’ve had in years. Sellers are becoming more flexible on pricing, underscored by the price reductions we’re seeing, and while higher mortgage rates are certainly weighing on demand, the silver lining is that the market is starting to rebalance. This could create opportunities for buyers who are prepared.”

Among the nation’s largest coastal enclaves, the required annual income may still feel precipitously high to some. Yet, homeownership rates appear to be holding steady.

San Jose, California, reported the highest income requirement at $370,069, an increase of 54.3% since 2019. Los Angeles ($315.892), San Francisco ($263,023), and San Diego ($258,926) all topped the list as well.

Median listing prices for those same California metros hover near the $1 million mark.

In Los Angeles, the minimum salary required to afford a home climbed 86% since 2019, while in San Francisco required a 30.5% increase, and in San Diego, +73.4%.

In many areas, wages have not kept pace with home prices.

According to a 2024 report from the Economic Policy Group, nominal wages (non-inflation-adjusted) increased roughly 34% between 2019 and 2024.

Median homes in Pittsburgh, Detroit, Cleveland, and Buffalo are considered the most affordable in the country, according to Realtor.com data.

In Pittsburgh, where the median listing price is $243,724, the annual salary threshold needed to purchase is $64,427. Detroit homes were comparable, with a median price of $253,575 and estimated required earnings of $67,031.

But with listings up 30.6% compared to last year, surpassing April 2020 levels, income thresholds could come down slightly, especially in certain regions.

The West (+41.7%) and South (+33.3%) led the way in active listings growth. Certain metro markets saw the biggest local gains, among them San Diego (+70%), San Jose (67.6%), and Washington, D.C. (+69.3%).

But despite those gains, Realtor.com data shows nationwide inventory is still below 2017 to 2019 norms.