Home shoppers today need to make more than $106,000 to comfortably afford a home, a new Zillow analysis finds. That is 80% more than in January 2020, showing how the math has changed for hopeful buyers, who are more often partnering with friends and family or “house hacking” their way to homeownership.

In 2020, a household earning $59,000 annually could comfortably afford the monthly mortgage on a typical U.S. home, spending no more than 30% of its income with a 10% down payment. That was below the U.S. median income of about $66,000, meaning more than half of American households had the financial means to afford homeownership, according to a news release,

Need to be Comfy

Now, the roughly $106,500 needed to comfortably afford a typical home is well above what a typical U.S. household earns each year, estimated at $81,000.1

“Housing costs have soared over the past four years as drastic hikes in home prices, mortgage rates, and rent growth far outpaced wage gains,” said Orphe Divounguy, a senior economist at Zillow. “Buyers are getting creative to make a purchase pencil out, and long-distance movers are targeting less expensive and less competitive metros. Mortgage rates easing down has helped some, but the key to improving affordability long term is to build more homes.”

A monthly mortgage payment on a typical U.S. home has nearly doubled since January 2020, up 96.4% to $2,188 (assuming a 10% down payment). Home values have risen 42.4% in that time, with the typical U.S. home now worth about $343,000. Mortgage rates ended January 2020 near 3.5%, keeping the cost of a home affordable for most households that could manage the down payment. At the time of this analysis, mortgage rates were about 6.6%.

Almost a Decade

For a household making the median income, it would take almost 8.5 years before they would have enough saved to put 10% down on a typical U.S. home, about a year longer than it would have in 2020.2 It’s no wonder, then, that half of first-time buyers say at least part of their down payment came from a gift or loan from family or friends.

With the cost of a mortgage rising, most millennial and Gen Z buyers say “house hacking” — the ability to rent out all or part of a home for extra cash — is very important. Co-buying with a friend or relative is another way to help with affordability, something 21% of last year’s buyers reported doing.

Metro areas where a buyer could comfortably afford a typical home with the lowest income are Pittsburgh ($58,232 income needed to afford a home), Memphis ($69,976)Cleveland ($70,810)New Orleans ($74,048), and Birmingham ($74,338). Pittsburgh, St. Louis, and Detroit are the only major metros where a typical home is affordable to a household making the median income.

Big Markets

There are seven markets among the major metros where a household’s income must be $200,000 or more to comfortably afford a typical home. The top four are in CaliforniaSan Jose ($454,296)San Francisco ($339,864)Los Angeles ($279,250), and San Diego ($273,613)Seattle ($213,984), the New York City metro area ($213,615), and Boston ($205,253) complete the list.

To help find a home within budget, home shoppers on Zillow can filter search results by monthly cost instead of by list price. The tool simplifies the complex calculation of translating a home’s list price into the monthly cost, factoring in the latest mortgage rates.

Qualifying

Those needing a down payment boost may qualify for down payment assistance. Home listings on Zillow include a down payment assistance module to help shoppers see what local resources could be available to them.

Metropolitan
Area*

Size
Rank

Income Needed
to Afford a
Mortgage,
January 2024

Change in
Needed
Income Since
January 2020

Zillow Home
Value Index
(ZHVI),
January
20243

Monthly
Mortgage
Payment,
10% Down4

Years to
Save a
10%
Down
Payment

Pittsburgh, PA

27

$58,232

$23,675

$201,487

$1,286

5.3

Memphis, TN

43

$69,976

$31,717

$230,807

$1,473

6.9

Cleveland, OH

34

$70,810

$30,227

$211,712

$1,351

6.0

New Orleans, LA

46

$74,048

$19,203

$232,870

$1,486

7.0

Birmingham, AL

50

$74,338

$31,875

$246,805

$1,575

6.7

Oklahoma City, OK

41

$74,732

$31,057

$226,048

$1,442

6.3

Detroit, MI

14

$75,662

$31,124

$236,025

$1,506

6.1

Buffalo, NY

49

$76,884

$34,744

$242,435

$1,547

6.5

St. Louis, MO

21

$76,895

$31,880

$238,231

$1,520

5.9

Louisville, KY

45

$77,450

$31,185

$243,810

$1,556

6.8

Indianapolis, IN

33

$82,037

$38,150

$267,301

$1,706

6.6

Cincinnati, OH

28

$86,027

$38,050

$267,423

$1,706

6.8

Kansas City, MO

31

$92,896

$40,742

$289,290

$1,846

7.2

Houston, TX

5

$95,374

$39,779

$300,955

$1,920

7.5

San Antonio, TX

24

$95,767

$38,307

$283,161

$1,807

7.5

Columbus, OH

32

$95,821

$43,405

$297,637

$1,899

7.3

Milwaukee, WI

40

$100,822

$42,613

$321,037

$2,049

8.5

Virginia Beach, VA

37

$102,703

$43,989

$332,820

$2,124

8.2

Chicago, IL

3

$104,757

$39,716

$300,906

$1,920

6.7

Richmond, VA

44

$106,170

$47,930

$349,558

$2,231

7.9

United States

0

$106,536

$47,490

$342,941

$2,188

8.4

Philadelphia, PA

7

$109,257

$47,837

$343,102

$2,189

7.5

Jacksonville, FL

39

$109,271

$51,617

$348,665

$2,225

8.2

Charlotte, NC

23

$111,051

$55,239

$368,712

$2,353

9.2

Hartford, CT

48

$114,109

$52,114

$334,712

$2,136

7.3

Minneapolis, MN

16

$114,344

$41,867

$355,511

$2,269

7.3

Baltimore, MD

20

$114,348

$44,063

$367,861

$2,347

7.6

Atlanta, GA

9

$115,430

$55,989

$370,548

$2,364

8.0

Tampa, FL

18

$116,329

$58,577

$370,474

$2,364

9.8

Las Vegas, NV

30

$119,529

$54,172

$407,516

$2,600

10.6

Dallas, TX

4

$121,398

$53,679

$366,690

$2,340

8.3

Orlando, FL

22

$121,418

$58,140

$386,687

$2,467

9.9

Nashville, TN

36

$128,535

$59,508

$425,827

$2,717

10.1

Raleigh, NC

42

$130,472

$62,410

$430,562

$2,747

8.7

Phoenix, AZ

11

$131,322

$65,017

$447,074

$2,853

9.9

Providence, RI

38

$142,928

$65,387

$449,025

$2,865

10.1

Austin, TX

29

$149,267

$65,144

$451,322

$2,880

8.8

Miami, FL

8

$151,163

$74,834

$472,970

$3,018

12.3

Salt Lake City, UT

47

$154,455

$72,592

$523,832

$3,343

10.6

Portland, OR

25

$161,624

$65,664

$528,724

$3,374

11.0

Washington, DC

6

$166,551

$64,078

$539,116

$3,440

8.2

Sacramento, CA

26

$172,261

$69,908

$559,243

$3,569

11.6

Denver, CO

19

$172,704

$71,338

$566,692

$3,616

10.7

Riverside, CA

13

$173,375

$81,676

$563,468

$3,595

12.6

Boston, MA

10

$205,253

$86,967

$650,890

$4,153

11.6

New York, NY

1

$213,615

$78,696

$627,944

$4,007

12.9

Seattle, WA

15

$213,984

$94,163

$697,824

$4,453

12.2

San Diego, CA

17

$273,613

$131,018

$902,199

$5,757

16.9

Los Angeles, CA

2

$279,250

$121,457

$918,247

$5,859

19.4

San Francisco, CA

12

$339,864

$119,614

$1,104,853

$7,050

16.0

San Jose, CA

35

$454,296

$191,071

$1,493,255

$9,528

18.8

*Table ordered by income needed to afford a mortgage in January 2024.

1 Median household income is taken from the American Community Survey (ACS) through 2022. Present-day estimates combine changes in the Employment Cost Index provided by the Bureau of Labor Statistics to forecast current median household income.

2 Years to Save figures assume a household saves 5% of its monthly income.

3 Smoothed and seasonally adjusted ZHVI.

4 Monthly mortgage payment includes principal and interest as well as estimated taxes and insurance for a 10% down payment on a home priced at that region’s ZHVI.

Source: Zillow