Need Nearly $117K for a Typical U.S. Home? Study Reveals All

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( GudangMovies21 )— Purchasing a house nowadays demands a six-figure income in most U.S. states, as reported by a new Bankrate analysis .

According to the personal finance website, American households require an annual income of $116,986 to manage buying a standard home — this represents almost a 50% increase compared to early 2020, where only $78,236 was necessary.

In 2020, only residents of six states required an annual salary over $100,000 to purchase a typical house. Currently, however, individuals in thirty states must earn a minimum of $100,000 yearly—significantly surpassing this threshold. median household income of $80,610 in 2023.

"Given the increased mortgage rates and the unprecedented spike in national home prices, numerous potential homeowners believe that purchasing a house is unattainable," stated Mark Hamrick, a senior economic analyst at Bankrate, in the report.

Hamrick pointed out that the affordability of homes differs significantly depending on the area.

Bankrate found that buyers in the Northeastern and Western areas require the highest incomes.

The U.S. lacks almost 4 million houses.

In Washington, D.C., families must earn over $240,000 annually to comfortably manage the cost of an average house in the region. Coming second was Hawaii with a required income of $235,638, followed by California at $213,447. Rounding out the top five were Massachusetts at $174,392 and Colorado at $168,643.

At the same time, various Midwestern and Southern states offer more budget-friendly options. West Virginia demands the lowest income for homeownership at $64,179 annually. Following closely behind are Iowa with an annual requirement of $70,437 and Ohio needing $71,080—both remaining under the six-digit mark. Mississippi comes next at $72,072, trailed by Indiana which stands at $72,342.

Many areas, especially those located in the Mountain West, have become considerably pricier compared to their previous affordability levels due to an influx of homebuyers relocating from California and Washington.

The largest increase was observed in Utah, where the income required to buy an average home surged almost 90%. This figure climbed from $80,214 in January 2020 to $151,956 in January 2025.

Real estate agent commissions have remained largely the same since the introduction of new NAR regulations.

Montana saw the second-largest increase in needed income over the period, up about 85% to $142,316. Wyoming was third with a roughly 80% spike over the past five years.

Texas, which is building more new homes more than any other state, has experienced the least growth in the income required to buy a home over the last five years, approximately 26%.

According to Bankrate, the required yearly earnings to manage a standard house were calculated with the assumption that buyers would not allocate more than 28 percent of their gross annual income towards housing costs.

Bankrate's examination relied on Redfin’s median selling prices from January 2020 and January 2025. For assessing affordability, they presumed a 20% down payment with neither HOA dues nor private mortgage insurance included. However, their calculations took into account typical statewide property taxes along with standard homeowner insurance premiums, plus the average weekly interest rate over the past year for a 30-year fixed-rate loan.

The ten states where one needs the highest income to buy an average-priced house in 2025, as reported by Bankrate, are listed below:

  1. Hawaii: $235,638
  2. California: $213,447
  3. Massachusetts: $174,392
  4. Colorado: $168,643
  5. Washington: $164,608
  6. New York: $160,300
  7. New Jersey: $160,001
  8. Utah: $151,956
  9. Rhode Island: $144,175
  10. New Hampshire: $142,775

Here are the top 10 states where you would need the lowest income to buy an average-priced house in 2025, as reported by Bankrate:

  1. West Virginia: $64,179
  2. Iowa: $70,437
  3. Ohio: $71,080
  4. Mississippi: $72,072
  5. Indiana: $72,342
  6. Arkansas: $73,330
  7. Michigan: $74,228
  8. Missouri: $74,263
  9. Louisiana: $76,145
  10. Oklahoma: $77,596
Copyright 2025 Nexstar Media, Inc. All rights reserved. This content must not be republished, distributed, broadcasted, or rewritten without permission.

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