Buyers Now Need to Make an Extra $17K to Comfortably Afford the Typical Home

With more homes currently available for sale, competition for buyers is dwindling. But that doesn’t mean that buyers can necessarily afford these homes. According to research from housing market platform Zillow, buyers need to earn a salary of approximately $100,000 to afford a home, but most aren't earning that. The typical buyer needs a $17,670 raise to afford the typical home priced at $367,969—and that’s assuming they have $73,594 saved for a 20% down payment. 

In some parts of the U.S., buyers need much higher raises. In four California metros, buyers would need raises of more than $100,000 to afford the typical home. Assuming they have 20% saved for a down payment, typical buyers in San Jose, Calif., still need raises of more than $250,000 to afford the typical home. In San Francisco, a typical buyer would need a raise of $165,566, and in Los Angeles and San Diego, the typical buyer would need a raise of $149,375 and $128,954, respectively.

There are 11 major markets where the median income is enough to afford the typical mortgage payment, down from 39 such markets five years ago. These are generally midsize markets in the Midwest and Northeast. Median earners in Cleveland have the most room to spare, making $11,588 more than what’s needed to afford the typical home, followed by Pittsburgh ($11,244), St. Louis ($4,897) and Cincinnati ($4,396).