Despite increases in household incomes across nearly every U.S. state, affording a typical home remains a challenge. According to data from the U.S. Census and Realtor.com, states like Rhode Island and Virginia saw notable income increases of 9.02% and 7.85%, respectively, from 2024 to 2025. However, the additional income is still insufficient for the median-priced home in each state.
Realtor.com senior economist Hannah Jones stated that while household incomes are rising, the growth is counteracted by increases in mortgage rates. Compared to last year, mortgage rates are over one percentage point higher, affecting buyer budgets and offsetting any gains from lower home prices and rising incomes. Thus, the national median household income of $84,780 in 2025, which represents a 3.8% increase from the previous year, still falls $31,136 short for affording a median-priced home priced at $419,250 in September 2026, assuming a 7.32% mortgage rate and a 10% down payment.
Realtor.com analyzed the additional income needed beyond the median household income across states to afford the median-priced home. While some states require only a few thousand dollars more, others need nearly six figures. Below is a breakdown for states in ascending order of additional required income:
- Iowa
Median income: $76,483
Income change: 1.30%
Additional needed: $2,287 - Illinois
Median income: $86,676
Income change: 4.16%
Additional needed: $3,168 - Ohio
Median income: $74,804
Income change: 3.59%
Additional needed: $3,718
The pattern continues up to Montana, where the median income of $77,099, despite a 2.33% increase, requires an additional $98,469.
“With national income increases failing to match home prices, challenges in affordability persist,” said Realtor.com.
Additional details highlight specific state discrepancies and the gap between income growth and housing costs. For example, in California, while the median income grew by 2.01% to $102,159, nearly $98,292 more in income is needed to afford a typical home. Similarly, Montana’s household income requires a $98,469 supplement to meet housing costs.
Increasing incomes are positive but are overshadowed by the challenges imposed by rising mortgage rates. Across the country, the complexity of the housing market continues to impact affordability.