Homebuyers need to earn over $52,000 more than renters in order to afford the median priced home.
Buying a home has become much more expensive than renting over the last several years. According to recent data from real estate marketing platform Redfin, Americans need to earn $116,633 per year to afford the median priced home for sale. Meanwhile, Americans need to earn just $64,160 per year to afford the typical apartment for rent. This means Americans on average need to earn more than 81% to purchase a home. This is a jump from last year when homebuyers needed to earn just 73.1% more than renters.
This is because home price growth has been outpacing rent price growth for the past few years. The median home price increased by 4.5% year-over-year to $423,892 as of February 2025. Additionally, elevated mortgage rates are only adding to the growing prices.
Meanwhile, the median asking rent rose just 0.2% year over year to $1,604 in February. Rents have stabilized below their record high because an influx of newly-built apartments ushered in by the pandemic construction boom has given renters more options. That has made it harder for landlords to boost rents. Supply in the for-sale market is more constrained—partly due to the mortgage-rate lock-in effect—which is fueling bidding wars and larger price increases.Read more
