The Salary Needed to Buy a House (2024)

Salary needed to buy a home article

The team at RubyHome compiled and computed real estate market statistics to show the income needed to buy a single-family home in the United States. We made year-over-year comparisons of median home prices and interest rates -- along with taxes and insurance calculations -- to generate monthly mortgage payment figures, and then computed the necessary salary to cover those payments.

Here's a summary of what you'll find on this page:

Home Affordability Key Stats

  • The salary needed to buy the average single-family home in the United States is $102,557.

$102557 income to buy home

  • Mortgage interest rates moved from 3.82% to 6.37% year-over-year, a 67% increase.
  • Homebuyers face 20-year-high mortgage rates, but still below the 8% historical average.

The Average Income Needed to Buy a House

Comparing the latest data, the income required to buy the average single-family home in the United States rose from $82,825 in Q1 2022 to $102,557 in Q1 2023, an increase of $19,733.

In the early summer of 2022, interest rates hovered at 3.10%. Then, the Federal Reserve began its effort to combat inflation by implementing successive interest rate hikes (.75 basis points each) until mortgage rates reached nearly 7%. Rates cooled in early 2023 when the average 30-year rate in Q1 of 2023 reached 6.37%. But that was still much higher than Q1 of 2022 when rates were 3.82%.

Suffice it to say, the cost of borrowing money (vis a vis interest rates) is much more expensive now. And, of course, monthly mortgage payments are now significantly higher, too.

Factors that Influence Home Affordability

The path to homeownership is determined by affordabilty, which the relationship among home prices, interest rates, and household income.

At any given time, one variable may outpace the others, but eventually, they return to equilibrium.

What’s more, each variable moves at a different pace. For example, the Federal Reserve’s interest rate change will immediately impact loan rates. However, household income and home prices change much slower, usually by months, if not years.

Current Real Estate Market Summary

  • Interest rates remained low until the summer of 2022, but the cost of borrowing went up quickly in the latter half of the year.
  • During the pandemic, home price increases outpaced household income. Today, home prices are somewhat stable, though a few hotter markets during the pandemic are seeing declines.
  • In the last half of 2022, salaries have grown, but only modestly.

As you might have guessed, home affordability is out of whack now. Interest rates are having the most impact on the market; they have the most significant change in velocity right now among the variables that influence how much income is required to buy a house.

The likely near-term scenario is that home prices will decline until a balance among the variables is restored.

Below you will find year-over-year changes in the income needed to buy a single-family home in the United States, both by national average and among the top cities.

Salary Needed to Buy a Home in the Top 50 Cities

U.S. MetroQ1 2023 Mdn PriceIncome NeededQ1 2022 Mdn PriceIncome NeededY-O-Y Income Change
National Avg. $371,200 $102,557 $372,000 $82,825 $19,733
Atlanta $354,300 $97,888 $350,300 $77,993 $19,895
Austin $467,900 $129,274 $540,700 $120,385 $8,889
Baltimore $357,800 $98,855 $350,900 $78,127 $20,728
Birmingham $276,500 $76,393 $289,500 $64,456 $11,937
Boston $644,400 $178,039 $639,000 $142,272 $35,767
Buffalo $206,800 $57,136 $202,300 $45,042 $12,094
Charlotte $387,200 $106,978 $379,900 $84,584 $22,394
Chigago $321,000 $88,688 $325,400 $72,449 $16,238
Cincinnati $252,200 $69,679 $244,300 $54,393 $15,287
Cleveland $191,400 $52,881 $192,700 $42,904 $9,977
Columbus $284,700 $78,659 $274,300 $61,072 $17,586
Dallas $372,400 $102,889 $365,400 $81,355 $21,534
Denver $636,100 $175,746 $662,200 $147,437 $28,309
Detroit $227,000 $62,717 $224,300 $49,940 $12,777
Hartford $314,900 $87,003 $291,000 $64,790 $22,212
Houston $327,000 $90,346 $330,800 $73,652 $16,694
Indianapolis $289,300 $79,930 $271,600 $60,471 $19,459
Jacksonville $370,000 $102,226 $365,900 $81,467 $20,759
Kansas City $291,000 $80,399 $287,400 $63,989 $16,410
Las Vegas $431,400 $119,190 $461,100 $102,663 $16,527
Los Angeles $746,800 $206,330 $792,500 $176,448 $29,882
Louisville $246,000 $67,966 $235,400 $52,411 $15,555
Memphis $268,600 $74,210 $259,300 $57,732 $16,478
Miami $560,000 $154,720 $530,000 $118,003 $36,717
Milwaukee $339,600 $93,827 $298,800 $66,527 $27,300
Minneapolis $361,500 $99,877 $355,800 $79,218 $20,659
Nashville $385,800 $106,591 $382,700 $85,207 $21,384
New Orleans $265,200 $73,271 $281,100 $62,586 $10,685
New York $577,300 $159,500 $578,100 $128,712 $30,788
Oklahoma City $227,300 $62,800 $198,200 $44,129 $18,671
Orlando $419,900 $116,013 $399,900 $89,037 $26,976
Philadelphia $315,300 $87,113 $297,900 $66,327 $20,786
Phoenix $439,700 $121,483 $474,500 $105,646 $15,837
Pittsburgh $191,000 $52,771 $199,200 $44,351 $8,419
Portland $556,800 $153,836 $570,500 $127,020 $26,816
Providence $417,000 $115,211 $406,700 $90,551 $24,661
Raleigh $420,000 $116,040 $439,100 $97,764 $18,276
Richmond $362,300 $100,098 $354,500 $78,929 $21,170
Riverside $550,000 $151,957 $560,000 $124,683 $27,275
Sacramento $500,000 $138,143 $545,000 $121,343 $16,800
Salt Lake City $231,100 $63,850 $216,700 $48,248 $15,602
San Antonio $522,700 $144,415 $556,900 $123,992 $20,422
San Diego $320,500 $88,550 $321,100 $71,492 $17,058
San Francisco $880,000 $243,132 $905,000 $201,496 $41,636
San Jose $1,192,600 $329,499 $1,395,000 $310,593 $18,906
Seattle $1,618,400 $447,141 $1,875,000 $417,464 $29,678
St. Louis $699,300 $193,207 $746,200 $166,139 $27,067
Tampa $390,000 $107,752 $379,900 $84,584 $23,168
Virginia Beach $313,200 $86,533 $289,900 $64,545 $21,987
Wash. D.C. $557,200 $153,947 $553,000 $123,124 $30,823

Methodology

RubyHome’s analysis is based upon the following data and assumptions:

  • Quarterly median single-family home prices (NAR)
  • Mortgage rates: 3.82% in Q1 2022, 6.37% in Q1 2023, St. Louis Federal Reserve Bank
  • Loan: 30-year mortgage
  • Down payment: 20%
  • Debt-to-Income (DTI) Ratio: 28% (front end ratio)
  • Taxes: 1.25% of purchase price
  • Insurance: 0.5% of purchase price
  • Property type: Single-family home
  • Cities defined by Metropolitan Statistical Areas (MSAs): Wikipedia

Excluded:

  • HOA fees
  • Closing costs
  • Mortgage insurance

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