The Rising Cost of Homeownership: How Much You Need to Afford a House in 2023

Potential homebuyers in the US need to earn at least $114,627 annually to afford a median-priced home, which is a new record and about $40,000 more than the typical American household income. This income requirement has increased by 15% in the past year and over 50% since the start of the pandemic. Rising mortgage rates were expected to lower demand and home prices, but low inventory and homeowners holding onto low mortgage rates have propped up prices. Homeowners are reluctant to sell as over 91% of mortgaged homeowners have rates below 6%. Buyers can find relief in condos or townhouses, which are less expensive, or by moving to more affordable suburbs.