Key Details:
- Zillow’s latest report shows that median-income households need a $17,670 raise to afford a typical U.S. home priced at $367,969, even with a 20% down payment.
- Only 11 major metros remain affordable for median earners, down from 39 five years ago.
Imagine telling a client they need a $250,000 raise to buy a home in their city. The words “lead balloon” come to mind.
Zillow’s latest affordability analysis shows just how far out of reach homeownership has become for many Americans, putting a number on something most agents already feel in every conversation with first-time buyers.
According to the data, a typical U.S. home now costs about $368,000, and a median-income household would need a $17,670 raise just to afford the monthly mortgage.
Even with a solid down payment of $73,594 (20% of the median home price), the income needed to afford that home is just shy of $100,000 per year. Buyers putting down only 10% would need a $36,287 raise to qualify.
And in some markets, the gap is even wider.
In 4 Major California Metros, Buyers Need Six-Figure Raises
In San Jose, even with $330,000 saved for a 20% down payment, a median-income household would still need a raise of more than $250,000 to afford a typical home. San Francisco, Los Angeles, and San Diego aren’t far behind.
These numbers reflect how far home values have climbed, especially on the West Coast, and how little wages have kept up. Here’s where the income gap is worst:
10 Metros with the Highest Required Pay Increase to Afford a Home
- San Jose, CA: $251,597
- San Francisco, CA: $165,566
- Los Angeles, CA: $149,375
- San Diego, CA: $128,954
- New York, NY: $99,343
- Seattle, WA: $84,356
- Boston, MA: $78,703
- Riverside, CA: $60,685
- Miami, FL: $59,379
- Sacramento, CA: $53,660
Most Affordable Metros Are in the Midwest and Northeast
Five years ago, median-income households could afford the typical home in 39 major U.S. metros. Today, that number is down to 11.
And the remaining affordable markets are mostly midsize cities in the Midwest and Northeast.
Cleveland leads the pack, where median earners make nearly $12,000 more than they need to afford a typical home. Pittsburgh, St. Louis, and Cincinnati are also among the few metros where homeownership is still within reach for the average household.
11 Metros Where the Median Income Is More than Enough to Afford a Typical Home
- Cleveland, OH: -$11,588
- Pittsburgh, PA: -$11,244
- St. Louis, MO: -$4,897
- Cincinnati, OH: -$4,396
- Birmingham, AL: -$3,933
- Buffalo, NY: -$3,137
- Indianapolis, IN: -$3,052
- Oklahoma City, OK: -$2,201
- Detroit, MI: -$1,804
- Louisville, KY: -$855
- Chicago, IL: -$187
Buyers Are Stretching—and Getting Creative
As the affordability gap grows, more buyers are relying on multiple sources to fund their down payments. According to Zillow:
- 72% use personal savings
- 46% use proceeds from the sale of a previous home
- 38% rely on gifts or loans from family or friends
At the same time, demand for single-family rentals is rising. Over the past five years, rents for single-family homes have jumped 41%, compared to a 30% increase for multifamily units.
For many would-be buyers, renting a house has become the more realistic (and stable) option, at least for now.
What Agents Should Keep in Mind
This report puts hard numbers to a reality many of your clients are already feeling. Buyers may not be saying “I need a $17,000 raise,” but they are asking whether homeownership is still worth the sacrifice.
Use this data to frame conversations around what’s actually attainable and what creative options are available. Talk about down payment assistance programs. Help buyers explore affordable metros they may not have considered.
And when it makes more sense to rent for now, be the agent who helps them plan for a future purchase rather than push them into a decision they can’t afford.
