Homebuyers need nearly $110K income to afford a typical home

Aug 07, 2026 - 16:05

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A new Redfin report finds a household must earn nearly $110,000 a year to comfortably afford a typical home. That figure is down slightly from last years record high.

Rising household incomes and slower home-price growth helped narrow the gap.

Still, the average household earns about $22,000 less than what is needed to comfortably buy a median-priced home.

Median household income rose 4% to $87,599, helping narrow the affordability gap. Still, the income needed to buy a home is about $22,000 higher than what a typical household earns.

Redfin defines affordable as spending no more than 30% of income on monthly housing costs, assuming a 15% down payment.

Starter homes are becoming somewhat more affordable, Redfin said. Buyers need an annual income of $70,693 to afford a typical entry-level home, down 1.5% from last year. Housing costs now consume 37.6% of a typical buyers income, down from 39.3% a year ago.

High mortgage rates are also keeping homeownership out of reach for many first-time buyers. The average rate reached 6.69% this week.

The earnings needed to buy a house have stabilized after several years of deterioration, but that doesnt mean homes are affordable to the average American, Redfin senior economist Yingqi Xu said. Theres 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.

But even if the market isnt becoming much more affordable, it is becoming a bit more manageable for house hunters. Its a buyers market in most of the country, especially places that were once pandemic homebuying hotspots like Nashville and Austin, giving buyers lots of options and strong negotiating power.