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Stagnant Wage Growth: Income growth has not kept pace, widening the gap between what buyers earn and what they need to afford a home.
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The Shrinking “Affordable” Middle Class: The share of homes a typical U.S. household can afford has dropped from over 50% in 2020 to under 25% in 2025. (Bankrate)
Mapped: The Income Required to Buy a Home in Every U.S. State
Two recent reports tackled the growing income hurdle facing homebuyers, and while their numbers differ slightly, their conclusions are similar. Bankrate estimates that purchasing a median-priced home in the U.S. (roughly $418,500) requires a household income of about $116,986, up nearly 50% from $78,236 in early 2020. Realtor.com puts the figure at $114,000 and highlights a dramatic shift at the state level: over 30 states (plus D.C.) now demand six-figure incomes to afford a typical home, a steep jump from just six states five years ago.
Exploring key aspects of housing affordability:
Focus on Westchester County:
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The Mortgage Rate Multiplier Effect: A median-priced home in Westchester that cost $720,000 in May 2020 would have had a monthly mortgage of $2,651 at a 3.7% interest rate. In 2025, the same home — now priced at $999,000, with a 6.75% mortgage rate — requires a monthly payment of $5,183. This scenario assumes a 20% down payment in both cases.
Ralph’s Take
In a high-cost area like Westchester County, one of the most expensive housing markets in the country, it’s uncommon to land your forever home straight out of college. I often advise first-time homebuyers to start with a cooperative, condominium, or modest single-family home. These entry points provide a way to build equity over time, laying the groundwork for a move-up purchase in five to seven years. While your dream home might feel out of reach today, with planning and financial discipline, it can become attainable in the future.
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