12 States Where Homebuyers Need a Six-Figure Income

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Americans in the market for a home this year will have to spend a larger part of their income to buy a house.

An analysis released Monday by Bankrate showed that homebuyers need an annual income of $110,871 to afford a median-priced home of $402,343, a nearly 50% increase since 2020. 

A combination of high mortgage rates, rising home prices and low housing inventory over the past two years is pushing homeownership further out of reach for would-be homeowners, especially first-timers. 

“Affordability is the biggest issue — finding a home that’s in your budget,” Bankrate housing market analyst Jeff Ostrowski said in a statement. “The higher the price of a home, the harder it is to come up with the down payment or to qualify for the monthly payment.”

To better understand the housing affordability crunch across the United States, Bankrate calculated how much aspiring homeowners must earn annually to afford a median-priced home in all 50 states and the District of Columbia, compared with four years ago. 

The analysis found that Americans need to earn six figures to afford a median-priced home in 22 states and the District of Columbia. Four years ago, only six states and the District of Columbia required a salary that high to afford a median-priced home.

Twenty percent of aspiring homeowners in Bankrate’s recent down payment survey thought that they would never be able to save enough to purchase a home.

Part of the reason is that wages have not kept pace with home prices, Bankrate said. Whereas the annual income needed to afford a typical home has jumped nearly 50% over four years, wages grew by only 23% between the 2019 fourth quarter and November 2023, according to the Center for American Progress.

In addition, mortgage rates have surged in the past few years. In January 2020, the average 30-year fixed rate was 3.68%. By March, it exceeded 7%, according to Bankrate’s survey of large lenders.

On top of having to contend with elevated home prices and high mortgage rates, prospective homebuyers also face a shortage of houses. Bankrate noted that many homeowners who locked in ultra-low mortgage rates during the pandemic intend to stay put to avoid soaring rates, shrinking the pool of available homes for sale.

See the accompanying gallery for the 12 states where homebuyers need the highest annual income to afford a median-priced home.

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