U.S. households now need to earn $114,000 annually to afford a median-priced home, a staggering 70.1% increase from the $67,000 needed just six years ago, according to the Realtor.com® April Housing Trends Report. While affordability has clearly eroded, there are emerging signs that the tide may be turning slightly in buyers’ favor. Inventory is growing, more sellers are reducing prices, and buyers are starting to gain more leverage in the housing market.
Americans need to earn about 70% more today than six years ago to comfortably afford a median-priced home
5/12/2025
“Even with today’s affordability hurdles, meaningful changes in the market could give buyers a better shot at finding a home,” said Danielle Hale, Chief Economist at Realtor.com®. “The number of homes for sale is rising in many markets, giving shoppers more choices than they've had in years. Sellers are becoming more flexible on pricing, underscored by the price reductions we're seeing. And while higher mortgage rates are certainly weighing on demand, the silver lining is that the market is starting to rebalance. This could create opportunities for buyers who are prepared.”
National Housing Metrics – April 2025
| Metric | April 2025 | MoM Change | YoY Change | Change Since Apr. 2019 |
|---|---|---|---|---|
| Median listing price | $431,250 | +1.5% | +0.3% | +36.9% |
| Active listings | 959,251 | +7.5% | +30.6% | -15.6% |
| New listings | 471,788 | +8.2% | +9.2% | -14.6% |
| Median days on market | 50 | -3 days | +4 days | -4 days |
| Listings with price reductions | 18.0% | +0.5 pts | +2.5 pts | +3.5 pts |
| Median price per square foot | $233 | +1.0% | +1.1% | +54.0% |
The $114K Threshold
To afford the median-priced home today, a buyer needs to earn $114,000 annually, based on a 30-year fixed mortgage, a 20% down payment, and housing costs not exceeding 30% of gross monthly income. This is a $47,000 jump since 2019, largely driven by rising home prices and higher mortgage rates. In some markets, the required income is even higher.
Highest Income Requirements by Metro Area
| Metro Area | Required Income | % Increase Since 2019 |
|---|---|---|
| San Jose-Sunnyvale-Santa Clara, CA | $370,069 | +54.3% |
| San Francisco-Oakland-Fremont, CA | $263,023 | +30.5% |
| Los Angeles-Long Beach-Anaheim, CA | $315,892 | +86.0% |
| San Diego-Chula Vista-Carlsbad, CA | $258,926 | +73.4% |
| Seattle-Tacoma-Bellevue, WA | $206,777 | +54.9% |
| Boston-Cambridge-Newton, MA-NH | $232,095 | +81.9% |
| New York-Newark-Jersey City, NY-NJ | $208,687 | +69.4% |
| Denver-Aurora-Centennial, CO | $158,462 | +42.2% |
| Sacramento-Roseville-Folsom, CA | $167,481 | +61.7% |
| Washington-Arlington-Alexandria, DC | $164,682 | +59.1% |
California dominated the list, with five metros showing the highest income hurdles. In fact, the state fared poorly in Realtor.com®'s recent affordability grading system—California has some serious work to do.
Pending Sales Losing Steam
After showing relative strength from October to December 2024, pending home sales have dropped for four straight months. In April, they fell 3.2% year-over-year, attributed largely to rising mortgage rates that have returned to early 2024 levels. Some prospective buyers are pausing their searches, casting uncertainty over the summer season.
| Month | YoY Change in Pending Sales |
|---|---|
| April 2025 | -3.2% |
| March 2025 | -5.3% |
| February 2025 | -5.4% |
| January 2025 | -4.1% |
| December 2024 | +2.4% |
| November 2024 | +8.2% |
| October 2024 | +4.3% |
Silver Linings Amid the Pressure
Despite headwinds, there are glimmers of opportunity for buyers. This month:
- 18.0% of listings saw price reductions
- Active inventory is up 30.6% YoY
- Inventory levels have surpassed April 2020, a key pandemic-era benchmark
These trends suggest sellers are becoming more realistic, and buyers may start to see
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