The amount that Americans need to earn to afford a typical U.S. home for sale has fallen, according to a new report from Redfin.
Homebuyers need to earn $111,252 per year to afford the typical U.S. home for sale, down 4% from $115,870 a year ago, according to Redfin. The company noted that the income needed to buy a home has been declining since November, providing some much-needed relief for U.S. homebuyers.
“The housing affordability crisis is showing signs of easing as costs come down slightly but meaningfully, opening the door for more Americans to make the jump to homeownership,” said Chen Zhao, Redfin’s Head of Economics Research. “While housing remains historically expensive, the trajectory is finally starting to reverse, with the door to buying a home opening a bit wider rather than closing tighter. But while affordability is improving, Americans are contending with other obstacles on the road to buying a home, like nerves about layoffs and economic uncertainty.”
Previously, the income required to afford a home had been rising on a year-over-year basis nearly every month for five years straight, since the pandemic homebuying boom increased home-sale prices, Redfin said.
The income necessary to buy a home peaked at over $122,000 in June 2025.
Report Focuses on December
Redfin said it considers a home affordable if a buyer taking out a mortgage spends no more than 30% of their income on their monthly housing payment. That is based on a Redfin analysis of median home sale prices, along with prevailing mortgage rates and property-tax payments, the website said.
Redfin said this report focuses on December 2025—the most recent period for which data is available—and comparable periods in past years.
Redfin noted that homebuying affordability is improving in 37 of the 50 most populous U.S. metropolitan areas. Affordability has improved most in Dallas, Sacramento, California, and Jacksonville, Florida.
Redfin said that homebuying affordability is improving nationwide because monthly housing costs are lower than they were a year ago. It said that the median home-sale price is $426,747, slightly higher than last year, but average mortgage rates are sitting around 6.1%, down from nearly 7% last year.
That makes the median monthly mortgage payment around $2,675, down from roughly $2,800 a year ago, which has pushed up the annual income required to buy a home downward.
Homebuyers are getting better deals than they have in the last several years.
A recent Redfin analysis noted that buyers are scoring the biggest discounts in 13 years, and another Redfin report shows that there are hundreds of thousands more buyers than sellers in the market, upping buyers’ negotiating power and pushing sale prices down.
Typical Household Earns $25K Less Than Needed
Redfin said that the typical American household earns an estimated $86,185, roughly $25,000 less than the income needed to afford the median-priced home. While monthly housing costs have come down enough for some higher earners to buy a home, lower earners are still priced out by a wide margin.
The trajectory is moving in the right direction: The median household income rose by about 4% from 2024 to 2025, the website said.
Redfin economists said they expect affordability to continue gradually improving throughout the year as wages continue rising while housing costs stay mostly stagnant.
Affordability has improved in most major metros, Led By Dallas and Sacramento.
In Dallas, Redfin reported that homebuyers need to earn $112,175 to afford the median-priced home, down 7.4% year over year—the biggest decline among the 50 metros in this analysis. The next-biggest declines are in Sacramento, California (-6.8% to $148,102) and Jacksonville, Floria (-5.9% to $97,898). San Jose, California and Austin, Texas, round out the top five.
Redfin said that affordability is improving most in those places because home prices have declined most. The typical monthly housing payment in Dallas is $3,191 per month, down about $300 from $3,426 per month a year ago. In Sacramento, the typical monthly housing payment is $3,752, down from $4,090, and in Jacksonville, it’s $2,161, down from $2,337.
Affordability Has Improved in 37 of 50 Most Populous Metros
Homebuying affordability has improved in 37 of the 50 most populous metros.
Conversely, homebuyers need to earn more than last year in some places where sale prices have increased. The biggest increase is in Detroit, Michigan, where buyers must earn $74,912 to afford the typical home, up 3.6% year over year. Detroit is followed closely by Chicago ($105,440, up 3.5%) and St. Louis ($73,984, up 3%). Buffalo, NY and Cincinnati round out the top five.
In the U.S. overall, Redfin noted that the typical household doesn’t earn enough money to comfortably afford a home. But homes are affordable to the typical household in 12 of the 50 most populous metro areas, all places where the typical home costs less than the national median.
In Pittsburgh, Redfin said that homebuyers must earn $66,168 per year to afford the median-priced home, and the typical local household earns $82,188. That makes Pittsburgh the metro where buyers have the most room in their budgets for monthly mortgage payments.
Next is St. Louis, where people need $73,984 to buy a home, and the typical household earns $87,471. Cleveland rounds out the top three: Buyers need to earn $66,725, compared to a median income of $76,912.
San Jose homebuyers must earn $374,241 annually to afford the median-priced home, the highest income of the metros in this analysis, Redfin said. Next area three other coastal California metros: San Francisco ($291,256), Los Angeles ($248,307) and San Diego ($231,151). New York ($196,544) rounds out the top five.
