Make six figures? Here’s how much you must earn to afford a house in 2024 (2024)

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New data shows that the average first-time home buyer must earn more than six figures to comfortably afford a median-priced home.

Clever, a real estate data company, analyzed median home prices and median incomes for 50 metro areas to find out how much yearly income a person needs to earn to afford a house in 2024.

With 10% down, a 30-year-mortgage, and an interest rate of 7.22%, Clever's analysis showed first-time buyers must earn $119,769 to comfortably afford a median-priced home ($332,494). This is about $45,000 more than the typical household earns each year.

When comparing a 20% down payment, Clever found that the median-priced home is affordable for the median earner in only six of the country's 50 largest metros and that 61% of Americans cannot afford a median-priced home, even after a 20% down payment.

Los Angeles is least affordable city for home buyers

For one's home to be considered affordable, the company used the 28/36 rule on housing – that a household should spend no more than 28% of its gross monthly income on housing, while using an additional 8% to pay off debts.

Make six figures? Here’s how much you must earn to afford a house in 2024 (1)

A "For Sale" sign outside of a home in Atlanta, Georgia, US, on Friday, Feb. 17, 2023. (Credit: Dustin Chambers/Bloomberg via Getty Images)

The data found that the median home sale price in Los Angeles is $897,173, and the annual mortgage payment on the median home is $69,852.

This means Los Angeles residents need an annual income of $249,471 to comfortably afford a median home, but only make $87,743 – a staggering $161,728 less than needed.

Statewide, the findings found that California is also the least affordable state for the average home buyer. According to the data, a median home in California sells for $798,854. After a 20% down payment, the monthly mortgage payment costs about $5,183, or $62,197 annually.

To comfortably afford that mortgage, a household must bring in about $222,132 annually. Yet, the median household in the state earns $91,551 – only about 41% of the income required to afford the home.

The least affordable U.S. metros for buying a home (based on 20% down payment):

  1. Los Angeles: $897,173 median home price,$249,471 income needed
  2. San Jose: $1,455,442 median home price,$404,705 income needed
  3. San Diego: $849,359 median home price, $236,175 income needed
  4. San Francisco: $1,088,519 median home price, $302,677 income needed
  5. New York City: $568,905 median home price, $175,153 income needed

See the full list here.

Six cities considered affordable for median-income households

With a 20% down payment, only six metro areas are affordable for the median earner, the data revealed.

Pittsburgh was found to be the most affordable city for home buyers.

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In Pittsburgh, the median home sells for $199,573. After a 20% down payment, the mortgage payment, which includes taxes and insurance, costs $1,398 per month, or $16,777 per year, based on a 30-year mortgage.

To afford that mortgage without exceeding 28% of one's income, a household would need to earn about $59,919 per year. The median household income in Pittsburgh is $70,607, meaning it's possible to comfortably afford a median-priced home there.

The most affordable U.S. metros for buying a home (based on 20% down payment):

  1. Pittsburgh, Pennsylvania: $199,573 median home price,$59,919 income needed
  2. Cleveland, Ohio: $182,652 median home price,$56,378 income needed
  3. St. Louis, Missouri: $225,674 median home price,$66,743 income needed
  4. Memphis, Tennessee: $213,929 median home price,$61,659 income needed
  5. Indianapolis, Indiana: $257,584 median home price,$73,398 income needed
  6. Birmingham, Alabama: $235,212 median home price,$65,216 income needed

See the full list here.

How can I afford a house?

According to the data, for a median-income earner to comfortably afford a median-priced home, they would need an average down payment of 45%.

Experts often recommend would-be buyers put down at least 20% when purchasing a home to lower monthly payments and avoid paying extra for private mortgage insurance. However, that goal has become less attainable over time.

Real estate outlook: Buying a home in 2024

Is 2024 a good time to buy a house? New York City real estate expert and agent Frances Katzen explains.

Today, the median buyer puts down 15% of a home's purchase price. The typical repeat buyer puts down 19%, while new buyers put down 8%. The last year that the median buyer put down 20% was in 1989, according to NAR data.

Clever said if mortgage rates dropped to 2.5% tomorrow, the same household would be able to afford a home that cost $300,000 — underscoring the impact of high mortgage rates on affordability.

RELATED: House flipping down nearly 30% as profits drop, data reveals

But real estate experts warn against waiting for interest rates to decline before purchasing a house, as home prices on-average will continue to increase in value.

This story was reported from Los Angeles.

Make six figures? Here’s how much you must earn to afford a house in 2024 (2024)


Is 2024 a good year to buy a house? ›

Experts like Fannie Mae and the Mortgage Bankers Association predict that mortgage rates will decrease in 2024 and continue to drop in 2025 but this likely won't be until the latter half of the year.

How much house can I afford with $100000 a year income? ›

Your financial situation dictates the value of homes you can afford with a 100k salary. Generally, a mortgage between $350,000 to $500,000 is feasible. However, a person with low Credit might only qualify for a $300,000 mortgage, while someone with excellent credit might qualify for a $500,000 mortgage.

How much do you have to make a year to afford a $750000 house? ›

How much do I need to make for a $750,000 house? A $750,000 house, with a 5% interest rate for 30 years and $35,000 (5%) down will require an annual income of $183,694.

Can I buy a house making $70000 a year? ›

Your DTI, interest rate, down payment, and other factors all play a role as well. The good news is that at $70,000, your income is slightly higher than the median annual household income of $67,521. Depending on the rest of your financial situation, you may already be well on your way to affording your dream home.

What is the 30-year mortgage prediction for 2024? ›

30-year mortgage rates are currently expected to fall to between 6.4% and 6.5% in 2024. Homebuyers might consider buying now and refinancing later to avoid increased competition when rates drop.

Will there be a housing recession in 2024? ›

Although there are certain factors that can point to a possible real estate housing market crash happening in our society right now, experts do not currently expect a housing market crash. The general consensus is that housing prices will not be dropping in 2024.

How much house can I afford if I make $36,000 a year? ›

On a salary of $36,000 per year, you can afford a house priced around $100,000-$110,000 with a monthly payment of just over $1,000. This assumes you have no other debts you're paying off, but also that you haven't been able to save much for a down payment.

Can I afford a 500K house if I make 100K a year? ›

That monthly payment comes to $36,000 annually. Applying the 28/36 rule, which states that you shouldn't spend more than around a third of your income on housing, multiply $36,000 by three and you get $108,000. So to afford a $500K house you'd have to make at least $108,000 per year.

Is 100K still a good salary? ›

For most individuals and small families, the answer to “Is $100,000 a good salary?” is a resounding “yes.” Cost of living and family size can affect how far $100,000 will go, but generally speaking, you can live comfortably on $100,000 a year.

What credit score is needed to buy a house? ›

The minimum credit score needed for most mortgages is typically around 620. However, government-backed mortgages like Federal Housing Administration (FHA) loans typically have lower credit requirements than conventional fixed-rate loans and adjustable-rate mortgages (ARMs).

Can I afford a 250k house on a 40K salary? ›

Quick Rule Of Thumb: Multiply Your Annual Salary By 2.5 or 3

The quickest way to work out how much house you can afford is to multiply your annual pre-tax salary by 2.5 or 3. If you want a conservative estimate, use 2.5. If you want a more aggressive estimate, use 3.

Can I afford a 300K house on a 60k salary? ›

An individual earning $60,000 a year may buy a home worth ranging from $180,000 to over $300,000. That's because your wage isn't the only factor that affects your house purchase budget. Your credit score, existing debts, mortgage rates, and a variety of other considerations must all be taken into account.

Can I afford a 300K house on a 70K salary? ›

If you make $70K a year, you can likely afford a home between $290,000 and $310,000*. Depending on your personal finances, that's a monthly house payment between $2,000 and $2,500. Keep in mind that figure will include your monthly mortgage payment, taxes, and insurance.

What credit score is needed to buy a $300K house? ›

The required credit score to buy a $300K house typically ranges from 580 to 720 or higher, depending on the type of loan. For an FHA loan, the minimum credit score is usually around 580.

How much rent can I afford making 70K? ›

How Much Rent Can I Afford – Chart
Your Annual Salary ($)Monthly Rent ($)
7 more rows
Jan 5, 2023

Is it a good time to buy in 2024? ›

Yes. This is the best time to buy a house in California. With the current trend in the CA housing market, you'll find better deals on your dream home during Q2 2024. As per Fannie Mae, mortgage rates may drop more in Q2 of 2024 due to economic changes, inflation, and central bank policy adjustments.

How high will mortgage rates go in 2024? ›

That means the mortgage rates will likely be in the 6% to 7% range for most of the year.” Mortgage Bankers Association (MBA). MBA's baseline forecast is for the 30-year fixed-rate mortgage to end 2024 at 6.1% and reach 5.5% at the end of 2025 as Treasury rates decline and the spread narrows.

What is the market prediction for 2024? ›

Wall Street analysts' consensus estimates predict 3.6% earnings growth and 3.5% revenue growth for S&P 500 companies in the first quarter. Analysts project full-year S&P 500 earnings growth of 11.0% in 2024, but analysts are more optimistic about some market sectors than others.

What will mortgage rates be in 2024? ›

Mortgage giant Fannie Mae likewise raised its outlook, now expecting 30-year mortgage rates to be at 6.4 percent by the end of 2024, compared to an earlier forecast of 5.8 percent.


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