Empire State Review Team 
Understanding Home Affordability: How Much Income Do You Need?
The dream of homeownership is becoming increasingly difficult for many Americans as housing prices continue to soar. Recent findings highlight that a substantial annual household income is required to afford a typical home in various states across the U.S.
Income Requirements Across the Nation
According to Bankrate’s 2025 Housing Affordability Study, individuals in 30 states along with Washington, D.C. must earn at least $100,000 per year to purchase a median-priced home in their respective areas.
States With the Highest Income Requirements
The following states are noted for their exceptionally high income demands for homebuyers:
- District of Columbia: $240,009
- Hawaii: $235,638
- California: $213,447
- Massachusetts: $174,392
- Colorado: $168,643
States With the Most Affordable Home Buying
Conversely, these states showcase significantly lower annual income requirements for potential homeowners:
- West Virginia: $64,179
- Iowa: $70,437
- Ohio: $71,080
- Mississippi: $72,072
- Indiana: $72,342
Strategies for Aspiring Homebuyers
While purchasing a house may seem out of reach, there are various strategies to improve affordability. Here are some key tips from Bankrate for those looking to enter the housing market:
- Assess how much of your income can reasonably be allocated towards housing.
- Focus on enhancing your credit score, as this significantly influences mortgage rates.
- Explore eligibility for down payment assistance programs tailored for lower- to moderate-income buyers.
- Consider a diverse range of housing options that fit within your budget.
- If you are not quite ready to buy, allow yourself the necessary time to prepare.
Analyzing the Data Behind Home Affordability
Bankrate’s findings were derived from an assessment of the minimum annual pre-tax income required to secure a median-priced home across all 50 states and Washington, D.C. The study utilized data from Redfin, comparing median sale prices from January 2020 to January 2025 to offer insight into the shifts in home affordability.
As the landscape of homeownership continues to evolve, it’s imperative for prospective buyers to equip themselves with knowledge about financial readiness and market conditions. Understanding local requirements and preparing strategically can pave the way for success in achieving homeownership.
