BAM Key Details:

  • According to a new survey from Clever Real Estate, prospective buyers need to earn at least $119,769 annually to afford a median-priced home of $332,494 with a 10% down payment. 
  • That income is $45,000 more than the typical American household earns per year ($74,755). 
  • Homes are affordable on today’s median salary in four states—West Virginia, Ohio, Iowa, and Indiana—and six of the 50 largest U.S. metros. 

Today’s home buyer needs to earn at least $119,769 a year to comfortably afford a median-priced home with a 10% down payment. 

According to a new survey from Clever Real Estate, the current median home price is $332,494. With a 20% down payment, the typical home buyer would still need to earn a minimum of $98,202, still well above the typical U.S. salary. 

According to data from the National Association of Realtors® (NAR), the last year the median home buyer put 20% down on a home was 1989. Today, the median buyer puts down 15%. 

Running the numbers

The median U.S. income is sitting at $74,755. With a 10% down payment, a buyer earning that amount could afford a home priced at $207,529—38% less than the current median home price. 

A median-income household aiming to purchase a median-priced home in today’s market would need to put down 45% of the home’s sale price, or mortgage rates would need to fall to 4%, for the numbers to work in their favor. 

Even if a buyer saves at a rate of $1,000 a month, it would take them 5.5 years to save the $66,500 needed for a 20% down payment on today’s median-priced home ($332,494).

As it stands, even with a 20% down payment, 61% of American homebuyers have been priced out of the market. 


Affordability varies by state and metro area

The median-priced home is affordable on the median salary in only four states—West Virginia, Ohio, Iowa, and Indiana—and six of the 50 largest U.S. metro areas:

  1. Pittsburgh, PA
  2. Cleveland, OH
  3. St. Louis, MO
  4. Memphis, TN
  5. Indianapolis, IN
  6. Birmingham, AL

At the other end of the spectrum, California is the least affordable state. And Los Angeles is the least affordable U.S. metro. Buyers in L.A. need an annual income of $249,471 to realistically afford a median-priced home, which comes with a price tag nearly three times the actual median local income of $87,743. 

First-time buyers need an even higher income to afford a median-priced home

First-time buyers typically make smaller down payments on a home purchase, mainly due to the time it takes to save 10% or more, let alone 20%. 

The typical down payment for a first-time homebuyer is 8% of the home’s sale price—less than half the typical 19% for repeat homebuyers, according to NAR data


As previously mentioned, with a 10% down payment, the typical homebuyer needs a household income of at least $119,769 a year, based on an average 30-year fixed rate of 7.22%, to comfortably afford a median-priced home in the U.S. ($332,494).

With a lower income, the monthly mortgage payment ($2,795) would consume more than 28% of the buyer’s household income. 

Read the full report for more information, including charts and methodology.