Affording A Home Now Requires Double The Salary Thanks To The Pandemic: Check Your City's New Reality

Sarah Johnson, a 32-year-old software engineer who recently moved to Chicago from Los Angeles, thought she was doing everything right. Good job, steady savings, excellent credit score. But she hit a wall when she set out to buy her first home this year.

"I make six figures, and I still can’t afford a decent place," Johnson told Benzinga. "It’s like the goal posts keep moving."

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She’s not alone. A report issued by Realtor.com quantified a trend: The salary needed to buy a median-priced home in the U.S. has nearly doubled since the start of the COVID-19 pandemic.

Until early 2022, the minimum income required for a median-priced home was close to the median household income. There's now a $36,000 gap between what Americans typically earn (about $84,000) and what they need to make (around $120,000) to afford an average home.

"This is how we think about the affordability curve," explains Hannah Jones, a senior economic analyst at Realtor.com. "How do incomes measure up against inventory?"

The answer, for many Americans, is poor.

The shift is most dramatic in coastal cities. In Los Angeles, the income required to buy a median-priced home has skyrocketed from $152,000 in 2016 to $335,000 today. Despite the growth, the median income falls short by $240,000.

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San Diego and San Jose are similar to LA, with median home prices now hovering around $1 million and $1.4 million, respectively. Boston and New York City are seeing their affordability crises unfold on the East Coast.

But it’s not just the usual suspects feeling the pinch. Kansas City, Missouri, once an affordable area, has seen its housing market transform. In 2016, the median income exceeded the minimum required for a home by $14,000. Today, there’s a $32,000 deficit.

"It’s not just about high demand," Jones said. "It’s also about how these cities manage inventory. Places like DC, which have seen crazy price growth because of limited inventory, showcase how significant these factors are in driving prices up."

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However, there are pockets of relative stability. Some Texas markets, including Houston, San Antonio, and Dallas, have managed to maintain some balance. Jones attributes that to the size of the markets and their ability to construct new homes, enabling "price growth to be more reasonable relative to incomes."

A few markets even buck the trend entirely. Detroit, Pittsburgh, and Baltimore stand out as examples where median household incomes still surpass the required income for a median-priced home. Those cities, with some of the country’s least expensive real estate, offer hope for those seeking affordable homeownership.

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