The median-priced home in the U.S. now costs $332,494, requiring prospective homebuyers to have an annual salary of at least $119,769 to afford it with a 10% down payment—according to a new survey from Clever Real Estate.
That is over $45,000 more than the average household makes annually, which an estimated $74,755. Even with a 20% down payment, homebuyers would need to earn at least $98,202, which is still significantly higher than the average earnings. According to National Association of Realtors data, the last time the median homebuyer put down 20% was in 1989. Today, the median buyer puts down only 15% of the buying price, on average.
The median U.S. wage earner ($74,755) with 10% down could only purchase a home for $207,529, some 38% less than the present median-priced home. A median-income family looking to buy a median-priced home would need a whopping 45% down payment, or mortgage rates would have to fall from 7.2% to 4% to make it work.
![Screen-Shot-2024-05-10-at-114207-AM - The MortgagePoint](https://themortgagepoint.com/wp-content/uploads/2024/05/Screen-Shot-2024-05-10-at-114207-AM-1024x762.png)
Even at a $1,000 monthly savings rate, a household would need five and a half years to save the $66,500 required for a 20% down payment on a home valued at the median of $332,494. Currently, approximately 61% of Americans are priced out of the market, even with a 20% down payment. If a household saves $500 each month toward a down payment, it will take 11 years to afford a 20% down payment of $66,500 on the typical home.
Only Four States Have Median-Priced Homes Considered Affordable
Of 48 states with available data, a median-priced home is not affordable for the typical household in 44 of them. The only four states where the typical home is financially attainable for the median household are:
- West Virginia
- Ohio
- Iowa
- Indiana
The most affordable state for the average household is West Virginia, where the median home sells for $175,432. After a 20% down payment, the monthly mortgage payment for the home is $1,106, or $13,273 a year. To comfortably afford that mortgage in West Virginia, a household should earn approximately $47,405 per year. The median household in the state earns $54,329 per year, indicating that it can generally buy a median-priced property.
While homebuyers can take advantage of the relatively modest pricing, sellers should be aware that West Virginia has the highest real estate commission rate in the country.
![Screen-Shot-2024-05-10-at-114403-AM - The MortgagePoint](https://themortgagepoint.com/wp-content/uploads/2024/05/Screen-Shot-2024-05-10-at-114403-AM-1024x830.png)
Less Than 10 U.S. Metros Boast an Affordable Median Home Price
The median home is affordable for median earners in just six of the 50 largest metro areas including:
- Pittsburgh
- Cleveland
- St. Louis
- Memphis, TN
- Indianapolis
- Birmingham, AL
Unsurprisingly, or maybe not, Los Angeles is the least affordable city in the U.S., requiring buyers to earn a whopping $249,471 to comfortably purchase a median-priced property—nearly three times the actual median income of $87,743. Pittsburgh is the most affordable metro for homebuyers. Comfortably affording the city’s median-priced home takes a household income of $59,919.
West Virginia is the most affordable state, affording the median-priced home requires an income of roughly $47,405. While it may come as no surprise, California is the least affordable state to purchase a home in. Affording the median home requires a household income of a whopping $222,132.
To many, owning a home is one of the most effective methods for Americans to accumulate wealth over time. However, as home prices have risen, homeownership has increasingly become a privilege limited to the nation’s wealthiest individuals.
To read the full report, including more data, charts, and methodology, click here.