Let’s start with the good news: U.S. workers’ pay is up roughly 4% this year, with median household income in April reaching roughly $88,000, according to government data. Now for the bad: That’s still nearly $30,000 short of what online real estate firm Redfin estimates Americans need to earn to afford a home.

Households need annual income of $116,780 to afford the average home, the firm said in a recent report, noting that this figure is down from a peak of $122,000 in mid-2025. Around the U.S., the typical property now costs nearly $418,000, according to the National Association of Realtors. 

A household earning the average U.S. income would need to spend 40% of its income on the median-priced home, Redfin found. Experts generally advise keeping monthly mortgage payments to no more than 30% of annual income after putting 15% down.

“Homebuying in the U.S. continues to be unaffordable,” Nancy Vanden Houten, lead U.S. economist at Oxford Economics, said in a client note, adding that “we expect that to remain the case over the next decade.”

Redfin’s data shows the median salary of nearly $88,000 isn’t enough to afford a house in 41 of the 49 most populous U.S. cities. In San Francisco, the priciest city for homeownership, a person would need to earn more than five times the median salary — nearly $444,000 — to afford a home. 

That comes as housing inventory in the California city fails to keep up with demand caused by the AI boom, which is bringing more tech workers to Silicon Valley, according to Redfin. In March, the median sales price in San Francisco was $1.7 million. Residents of San Jose, another city in the heart of Silicon Valley, need an income of roughly $426,000.

By contrast, Redfin points to eight cities where a median income is enough to buy a home, including six in the Midwest. In Detroit, for example, a household would need to earn $56,219 to buy a home, which is below the city’s estimated median income of $65,687 and the overall U.S. median, according to Redfin. 

Other cities where $88,000 a year is enough to afford a home (local median incomes are noted in parentheses):

• Cleveland, Ohio ($73,261)
• Pittsburgh, Pennsylvania ($73,411)
• St. Louis, Missouri ($77,743)
• Philadelphia, Pennsylvania ($85,541)
• Cincinnati, Ohio ($85,615)
• Indianapolis, Indiana ($86,460)
• Warren, Michigan ($86,880)

Housing has become slightly more affordable over the last six months as people’s pay rises faster than home prices and mortgage rates ease, according to Oxford Economics. 

But homeownership still remains out of reach for millions of people. More than 8 in 10 Americans say it is harder today to buy a home than it was for earlier generations, according to a February CBS News poll. 

“More than twice as many Americans live in the top 10 states with the highest home price-to-income ratios compared to the 10 states with the lowest price-to-income ratios, where homebuying is more affordable,” Vanden Houten noted.