Americans require almost twice the annual salary to afford a median-priced home compared with a typical apartment for rent. According to a Redfin report, this threshold is $116,633 per year, which is 81.8% more than the $64,160 needed to afford the typical rental unit.
The trend has continued to widen. Last year, a home buyer would have needed to earn $110,808 to afford a typical home for sale, about 73% more than the $64,000 required of renters. Two years ago, the gap was only 54.5%, with buyers needing to earn $101,341 and renters needing $65,600. Going back to 2021, homeowners only needed to earn $63,925 per year to afford the typical home for sale, 17.3% more than the $54,520 required for a typical rental.
Redfin bases affordability on the commonly cited metric that homeowners should spend no more than 30% of their income on their monthly housing payment. The typical U.S. household earns roughly $86,000 per year, which is $30,000 less than they need to afford the typical home for sale.
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Kristen Smithberg
Kristen Smithberg is a Colorado-based freelance writer who covers commercial real estate, insurance, benefits and retirement topics for BenefitsPRO and other industry publications.
