The 6-figure income needed to afford the average US home remains at a record high

For the first time in years, US homebuying affordability has plateaued. The bad news: You still need to earn six figures to buy a home.

The household income needed to scoop up a typical home in the country — and spend no more than 30% of income on a monthly mortgage payment — sits at $109,796, according to a June report from Redfin. That is down a marginal 0.5% from an all-time high of $110,382 a year ago.

Six figures is a far cry from reality for many people.

Consider that the median US household brings home just $87,599 annually, though that’s up 4% year-over-year.

It still takes a shiny six-figure salary to buy a home in America.

“The earnings needed to buy a house have stabilized after several years of deterioration, but that doesn’t mean homes are affordable to the average American,” Yingqi Xu, a senior economist at Redfin, said in a statement. “There’s still a double-digit gap between what the typical household earns and what they need to comfortably buy a home, leaving many prospective first-time buyers stalled on the sidelines.” 

For the average buyer, purchasing a median-priced property would consume roughly 38% of their annual household earnings.

On the plus side, the $22,197 affordability deficit — the difference between the $109,796 needed to nab a home and the $87,599 median salary — has shrunk over the past two years, down from $26,125 last year and $28,834 two years ago. 

Plus, incomes and monthly housing costs are increasing at about the same rate. 

Additionally, there are more options for the average Joe, with 34.2% of active listings now considered affordable, up from 30.5% a year prior.

Two years ago, the typical household made $28,834 less than what was required to buy a average home. Last year that gap shrank to $26,125. Today the gap has narrowed even further down to $22,197. Andrew – stock.adobe.com

Entering the market for the first time is a bit easier now. First-time homebuyers need to earn $70,693 to afford the typical US entry-level home, down 1.5% from a year ago.

Nearly half of major US metropolitan areas, like Seattle and San Jose, saw improvements in homebuying affordability.

Typical households make enough to buy a median-priced home in just three major cities: St. Louis, Indianapolis and Pittsburgh.