The numbers tell a story that would have seemed implausible just five years ago: homebuyers in 30 states and the District of Columbia now need a household income exceeding $100,000 to afford the typical home in their area. In 2020, that was true in just six states. The transformation represents one of the most dramatic shifts in housing affordability in American history, and for millions of would-be homeowners, it has fundamentally altered what the path to property ownership looks like.

The Affordability Math Has Changed

According to a comprehensive analysis from Bankrate, Americans now need at least a six-figure salary to comfortably own a typical property in most markets—yet the average salary in the United States is just about $64,000. The disconnect has grown into a chasm that traditional advice about saving for a down payment simply cannot bridge.

The most recent data shows that buyers need an annual household income of $116,986 to afford the typical home nationwide. That represents a nearly 50% increase since early 2020, when the income needed to buy a typical home was $78,236. The drivers are familiar but relentless: mortgage rates that remain near 6.5% despite Federal Reserve rate cuts, and home prices that have climbed roughly 50% above pre-pandemic levels.

"When only a sliver of the market is affordable to the typical household, homeownership starts to feel less like a milestone and more like a luxury. It's no surprise that one in six aspiring homeowners have walked away in the last five years."

— Alex Gailey, Bankrate data analyst

The Geographic Divide Deepens

The affordability crisis has reshaped America's housing map in ways that would have been difficult to predict. Nearly one-third of 390 tracked metropolitan areas now require double the salary needed to afford a home compared to 2019, and almost half of all metro areas require six-figure incomes to purchase a typically priced property.

The impact falls hardest on essential workers in high-cost markets. In Asheville, North Carolina, civil engineers cannot afford to buy a home despite salaries approaching $100,000. Construction laborers and electricians in the same market cannot even afford to rent one-bedroom apartments. In Seattle, a dentist earning over $200,000 annually cannot afford a typically priced home with a 10% down payment.

These examples illustrate a fundamental breakdown in the relationship between wages and housing costs. Professions that were once reliable pathways to homeownership now leave workers locked out of the markets where they're most needed.

Middle-Class Buyers Face a Shrinking Market

For middle-income households—those earning between $50,000 and $100,000—the situation has become particularly dire. Data shows that these buyers can now afford to purchase just 21% of the homes currently available for sale. Before the pandemic, the same demographic could afford approximately 50% of available inventory.

More than 75% of homes on the market are now unaffordable to the typical American household, according to Bankrate's analysis. The average aspiring homebuyer is roughly $30,000 short of what it takes to afford a median-priced home—a gap that cannot be closed through minor adjustments to spending habits or slightly larger down payments.

Higher borrowing costs have exacerbated the squeeze. Today's buyers can afford roughly 30% to 40% less house than they could in 2021, when mortgage rates hovered near historic lows. The combination of elevated rates and elevated prices has created a double bind that leaves many would-be buyers feeling paralyzed.

The Path Forward Remains Unclear

Housing economists point to several factors that could eventually ease the crisis, though none offers near-term relief. Redfin has predicted that 2026 could mark the beginning of a "Great Housing Reset"—a multi-year period where incomes finally begin rising faster than home prices for the first time since the Great Recession era.

The price-to-income ratio, which peaked above 5x income in 2022, has begun to ease slightly. Forecasts show it could drop to around 4.9x by the end of 2026. While this represents progress, historians note that a ratio around 4x has traditionally signaled a more balanced, affordable market environment.

However, achieving broad affordability would require one of three unlikely developments: a steep drop in mortgage rates to the mid-2% range, a more than 50% jump in household incomes, or a roughly one-third decline in home prices. None of these scenarios appears likely in the near term.

What Buyers Can Do Now

For aspiring homeowners navigating this landscape, financial advisors suggest several strategies. Expanding geographic searches to include markets where affordability remains more accessible can open opportunities, though this often means accepting trade-offs in terms of job markets or community ties. Building larger down payments reduces monthly payment burdens and can help buyers compete in tight markets.

Some buyers are finding success with alternative approaches: house hacking—purchasing multi-family properties and renting out units to offset mortgage costs—has gained popularity among younger buyers. Others are exploring partnership arrangements where friends or family members pool resources to purchase properties together.

The broader reality, however, is that for many Americans, the decision about whether and when to buy a home has been taken out of their hands by market forces beyond their control. Until the fundamental equation of incomes versus housing costs shifts meaningfully, the six-figure barrier will continue to reshape who can participate in the traditional path to building wealth through homeownership.