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Rents Stabilize, But Buying a Home Still Requires Six-Figure Salary

Homeownership Slips Further Out of Reach for U.S. Renters

Americans now need to earn over $116,000 per year to afford the median-priced home in the U.S.—nearly 82% more than required to rent the typical apartment, according to a new report from Redfin.

That figure reflects a sharp increase from prior years and marks the widest income gap between homebuyers and renters on record. In contrast, someone only needed to earn $64,160 annually to afford the typical apartment, based on the latest February data.

Redfin defines affordability as spending no more than 30% of income on monthly housing costs. According to its analysis, the cost of buying a home has been rising much faster than the cost of renting, driven by persistent home price growth, high mortgage rates, and limited housing supply.

In February, the median home sale price in the U.S. rose to $423,892, up 4.5% year-over-year, while average 30-year mortgage rates remained above 6.5%, more than double the lows seen during the pandemic. Meanwhile, rents rose just 0.2% to a median asking price of $1,604, as the market benefited from a wave of new apartment construction that increased supply and kept rent growth in check.

The typical U.S. household earns about $86,382 annually—roughly $30,000 less than what’s now needed to afford a median-priced home.

“It has become increasingly challenging for American renters to make the shift to homeownership thanks to the triple whammy of rising home prices, high mortgage rates, and a shortage of houses for sale,” said Elijah de la Campa, Redfin senior economist. “The gap between what someone must earn to buy versus rent may shrink in the coming months, but only because rents are expected to rise as the number of new apartments hitting the market tapers off due to a construction slowdown.”

In Salt Lake City, homebuyers need to earn $140,412 annually—134% more than what’s required to rent in the area, the steepest jump among the 42 major metro areas analyzed by Redfin. That’s a 28 percentage-point increase from last year.

Other cities showing large spikes in the income gap include:

  • Austin, TX: +24.6 points (143% more to buy than rent)
  • San Diego, CA: +21.7 points (127%)
  • New York, NY: +20.7 points (76%)
  • Los Angeles, CA: +20.7 points (141%)

In most of these cities, rents are falling while home prices continue to rise. In Salt Lake City, for example, asking rents fell 7.8% year-over-year while home prices increased by 4.3%.

In San Jose, CA, the disparity is most extreme. Buyers need to earn $408,557 annually to afford a home—218% more than the $128,580 needed to rent. That’s the highest homeownership premium in the country.

Other West Coast cities leading the list include:

  • San Francisco, CA: 176% more to buy than rent
  • Seattle, WA: 145%
  • Austin, TX: 143%
  • Los Angeles, CA: 141%

These cities, often tech-driven economies, have long been among the most expensive in the country. Despite New York City’s reputation for high costs, it ranked sixth in home buying expenses, with a smaller gap between renting and buying due to its already high rent levels. In New York, buyers must earn $199,708 annually—76% more than the $113,440 required to rent.

You can read the full report here.

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