• A significant majority of U.S. homes are financially out of reach for the typical household. A Bankrate analysis concluded that over 75% of American homes are unaffordable for a household with a typical income, defining affordability as housing costs not exceeding 30% of earnings. One analyst from the firm stated that this situation is making homeownership feel more like a luxury than a common milestone.
• There is a substantial gap between average earnings and the income required for homeownership. The study found that an annual income of $113,000 is needed to afford the median-priced U.S. home of approximately $435,000. This is significantly more than the median household income of nearly $84,000, and the income requirement rises to at least $200,000 in the nation’s most expensive cities.
• The rate of homeownership is declining, especially among first-time buyers. Data from the Federal Reserve Bank of St. Louis shows the U.S. homeownership rate fell to about 65% in 2025, down from a peak of over 69% in 2004. The impact on new buyers is particularly stark, as first-time homebuyers accounted for just 24% of sales last year, a dramatic decrease from 50% in 2010.
How it may affect me
As a U.S. reader:
• Households earning a typical income may find it difficult to buy a median-priced home, as the required salary is significantly higher than the national median income.
• First-time homebuyers face major challenges entering the market, which could lead more people to rent for longer as the share of new buyers has sharply declined.
• Your ability to find a new home may depend on your location, with construction lagging in the Northeast and Midwest compared to the South and West.
• A forecasted slight drop in mortgage rates by 2026 could offer minor relief for homebuyers, though the extent of this impact remains speculative.
