Here’s the Minimum Salary Required To Pay Off the Average Mortgage This Year
Written by
Jamie Stone
Edited by
Zuri Anderson
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Owning a home has long been a cornerstone of the American dream. However, new data from Redfin shows that achieving this goal is becoming increasingly difficult due to rising home prices and mortgage rates.
As of early 2025, a household must earn at least $116,782 annually to afford the median-priced home in the United States, assuming housing costs should not exceed 30% of income.
GOBankingRates breaks down why the income required has reached this level, and what you can do to alleviate the financial strain of homeownership.
Also find out the salary needed to afford a home in 2025.
Rising Costs Outpacing Income Growth
This required income represents a 35% increase from just two years prior, while the median household income has not kept pace. This widening gap highlights the mounting challenge facing potential homebuyers as they grapple with higher mortgage payments and stagnant wages.
Geographical Variations in Affordability
Affordability continues to vary dramatically by state. In more than half the country, including 30 states and the District of Columbia, households need to earn over $100,000 annually to buy a median-priced home.
In more affordable states like West Virginia, the required income is closer to $64,000, whereas buyers in high-cost states like California and Hawaii face significantly steeper thresholds due to elevated housing markets.
Impact of Mortgage Rates and Home Prices
The increase in required income is largely attributed to the continued rise in home prices and mortgage rates. According to Redfin, the median U.S. home price in Q4 of 2024 was $420,000, and monthly mortgage payments for a typical home have climbed to around $2,715 — an all-time high.
Strategies for Prospective Homebuyers
Given today’s economic pressures, potential buyers may need to adjust their approach to homeownership. Consider these strategies:
- Boost your credit score: A better credit profile can unlock lower interest rates, translating into reduced monthly payments.
- Research down payment assistance: State and local programs can help offset upfront costs for first-time buyers.
- Expand your search: Exploring smaller cities or less expensive housing types, like townhomes or condos, may reveal more attainable options.
- Wait and save: Holding off until your financial situation improves can reduce the likelihood of overextending your budget.
While the path to homeownership is more challenging than in years past, careful planning and informed financial decisions can still make this goal achievable.
More From GOBankingRates
Sources
Redfin, “Housing Affordability Didn’t Worsen in 2024–The First Time in Four Years That Has Happened.”
