The New Reality

Homeownership in America now requires a six-figure income in most major cities.

According to 2025 data from Redfin and US Census estimates, you need approximately $112,000 in household income to afford a median-priced home. That's more than 30% above the actual median income.

With median home prices above $440,000 and mortgage rates hovering near 7%, affordability has collapsed across the country. Out of the top 50 metro areas, only three remain affordable for median-income households under traditional lending standards.

The 30% Rule Is Dead

For decades, financial advisors recommended spending no more than 30% of gross income on housing. That benchmark is now impossible for most homeowners.

A typical American household now spends over 44% of its income to cover the mortgage on a median-priced home, according to Redfin's August 2025 report. That's nearly half of household income going just to housing costs.

The Affordability Winners (All Three of Them)

Only Pittsburgh, St. Louis, and Detroit offer homes that median-income households can afford.

Pittsburgh is the most affordable. The median home price sits at $252,000, requiring an income just over $70,000 - roughly aligned with local earnings. St. Louis and Detroit show similar patterns where required income matches what residents actually earn.

That's it. Three cities out of 50 where housing math still works.

The Affordability Disasters

Los Angeles requires a $271,000 income to afford the $1.15 million median home. That's three times the city's median income.

San Jose needs $323,000 in income for its $1.37 million median home - more than double the city's $157,000 median income.

Even less extreme markets show severe disconnects. Miami's $510,000 median home requires $126,000 income - 70% higher than local median. Phoenix needs $121,000 for a $505,000 home. Dallas requires $119,000 for a $440,000 home.

Mid-market cities like Atlanta, Houston, and Orlando all require six-figure incomes now. These used to be affordable alternatives to coastal cities. Not anymore.

The Math Behind the Crisis

The analysis assumes a 30-year mortgage at 7% interest, 20% down payment, and housing costs capped at 30% of income - traditional lending standards.

Under those assumptions, a $440,000 home (the national median) requires $112,000 in household income. But the actual US median household income is around $80,000. That 30%+ gap makes homeownership mathematically impossible for typical households.

Why This Happened

Two factors collided: Home prices rose dramatically over several years while mortgage rates spiked from historic lows near 3% to around 7%.

A $400,000 home with a 3% mortgage has monthly payments around $1,350 (excluding taxes and insurance). The same home at 7% costs about $2,130 monthly - a nearly 60% increase in payment for the same house.

Meanwhile, median home prices climbed from around $350,000 in 2020 to over $440,000 today. Higher prices plus higher rates created an affordability catastrophe.

The Bottom Line

Housing affordability in America has reached crisis levels in 2025.

When 47 of the top 50 metros are unaffordable for median-income households, that's not a housing shortage problem - it's a systemic breakdown. The traditional path to homeownership has been severed for most Americans in most cities.

The 44% of income going to housing costs shows how desperate buyers have become. They're violating basic financial rules just to get into homes, leaving less for savings, retirement, and emergencies.

Cities like LA and San Jose requiring 2-3 times median income are completely disconnected from local economic reality. Who are these homes for if not the people who work in these cities?

Even "affordable" markets like Phoenix and Dallas now require $120,000+ incomes. That prices out teachers, nurses, police officers, and countless other professions.

The three remaining affordable cities - Pittsburgh, St. Louis, Detroit - are essentially Rust Belt metros with declining populations and limited economic growth. Affordability there reflects weak demand, not healthy markets.

For millions of Americans, homeownership has shifted from achievable goal to distant dream. Unless home prices fall dramatically or incomes rise substantially, an entire generation may remain permanently locked out of ownership in most major cities.

The data makes clear that 2025 has fundamentally redrawn America's housing landscape - and not for the better.