US housing market 2026 : Even though wages in the United States have risen this year, many families still feel homeownership is slipping further out of reach. Household income has climbed to roughly $88,000, according to government data, but that increase has not kept pace with what buyers now need to comfortably afford a home in many American cities.
Why Higher Salaries Still Are Not Enough to Buy a Home
A recent Redfin report estimated that households now need an annual income of about $116,780 to afford the average home in the US, as reported by CBS News. While that figure has eased slightly from a peak of $122,000 in mid-2025, it still remains far above the country’s median household income.
The typical US home now costs close to $418,000, as per the National Association of Realtors. As a result, many middle-income households are finding themselves stretched financially when trying to enter the housing market.
How Much of Their Income Americans Are Spending on Housing
Redfin found that a household earning the national median income would need to spend around 40% of its earnings on a median-priced home, as per the CBS News report.
Financial experts generally recommend keeping mortgage payments closer to 30% of annual income after making a 15% down payment. That gap highlights why many buyers continue to struggle even as paychecks slowly increase.
Why Economists Believe Housing May Stay Unaffordable for Years
Economists say affordability challenges are unlikely to disappear soon.
Nancy Vanden Houten, lead US economist at Oxford Economics, said "Homebuying in the U.S. continues to be unaffordable," adding that "we expect that to remain the case over the next decade," as quoted by CBS News.
Although home prices and mortgage rates have shown some signs of easing over the past six months, affordability remains difficult for millions of Americans.
San Francisco and Silicon Valley Continue to Lead Housing Costs
The affordability gap is especially severe in technology-driven markets.
In San Francisco, buyers now need an income of nearly $444,000 to afford a home, according to Redfin. The city’s median home sale price reached around $1.7 million in March.
Nearby San Jose also remains extremely expensive, with households needing roughly $426,000 annually to purchase a home.
Redfin said housing inventory in San Francisco has struggled to keep up with demand linked to the AI boom and the continued arrival of tech workers into Silicon Valley, as per the CBS News report.
Midwest Cities Where Buying a Home Is Still More Realistic
While many large US cities remain expensive, some Midwest markets continue to offer relatively affordable homeownership opportunities.
Detroit was highlighted as one of the few cities where the required income to afford a home, estimated at $56,219, remains below both the city’s median income and the national median income.
Other cities where earning around $88,000 may still be enough to afford a home include:
- Cleveland, Ohio
- Pittsburgh, Pennsylvania
- St. Louis, Missouri
- Philadelphia, Pennsylvania
- Cincinnati, Ohio
- Indianapolis, Indiana
- Warren, Michigan
Americans Increasingly Feel Homeownership Is Harder Than Before
Many Americans believe buying a home today is significantly more difficult than it was for earlier generations as a February CBS News poll found that more than 8 in 10 Americans said homeownership feels harder now than it did in the past.
Vanden Houten pointed out that, "More than twice as many Americans live in the top 10 states with the highest home price-to-income ratios compared to the 10 states with the lowest price-to-income ratios, where homebuying is more affordable," as quoted by CBS News.
FAQs
Why are Americans struggling to buy homes despite higher wages?Home prices and mortgage costs remain much higher than median household incomes.
How much income is needed to afford an average US home?
Redfin estimates households need around $116,780 annually.
