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Why Are Houses So Expensive? 2025 Data Shows Just Two Affordable U.S. Cities for Buying Homes

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May 19, 2025

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American Median Home Prices vs. Required Incomes | Affordable Housing for Median Earners in Just Two Cities | Most and Least Affordable States | Homeowners Insurance and Property Tax Differences | Methodology | FAQs 

From the bustling streets of America’s biggest cities to the quietest rural towns, the places people call home across the United States are as unique and diverse as the people who live there. So too are the incomes of American homeowners, with median earners in Massachusetts ($99,858) making nearly twice as much as those in Mississippi ($54,203). 

As might be expected, the cost of housing tends to follow local incomes, with high-income areas typically offering pricier homes and vice versa. However, this relationship isn’t the same everywhere. In some parts of the country, buying the typical house can be a relative bargain for median earners, while in others, these average-income households find themselves far from the dream of homeownership. 

Overall, just two of America’s 50 largest metros offer median salaries that are high enough for those earning them to affordably buy a median-priced home: Detroit and Pittsburgh. 

In addition, Iowa is the only state in the nation that’s affordable on a statewide basis.

Meanwhile, although home prices remain the most significant factor in housing affordability, the differences in property tax and insurance expenses are growing in influence, creating wide gaps in necessary income between states with similarly priced homes.

To find out more, Clever Real Estate analyzed data, including the average price of a home sold in each market, median household incomes, property tax rates, and homeowners insurance costs for these largest markets, and factored this against the well-known 28% rule for home affordability. This rule of thumb dictates that a household’s housing costs shouldn’t exceed more than 28% of its gross, pre-tax income. 

Read on to learn more about the bleak housing affordability picture for median-earning Americans and which areas offer better opportunities for owning a typical home on a typical salary.

*Using the 28% rule and typical state homeowners insurance and property tax rates.

Typical American Household Earns Just 70% of Income Required to Afford Median-Priced Home

Although it’s obvious that there are profound differences in the cost of housing between different cities and states, it’s critical to recognize that the nation overall faces significant affordability issues. 

To afford the median-priced U.S. home of $438,000, homebuyers would need a household income of $123,226. This is based on a metric of 28% of income spent on total housing costs, with 20% down and a 6.65% mortgage rate, plus nationwide averages for home insurance and property taxes.

However, the median household is only making $77,719 per year, an astounding shortfall of $45,507. The typical earners in this household would need a roughly 59% raise to reach the income level required. 

It’s worth considering that the median household income in the United States takes into account more than one earner; real median personal income in the United States is just over $42,000. For a person or household earning that amount and putting 20% down, they’d only be able to affordably purchase a home that costs $145,000 to $160,000, a challenging thing to find these days in just about every medium and large housing market. 

*Using the 28% rule and typical state homeowners insurance and property tax rates.

For the actual median US household income of $77,719, with a 20% down payment, the median home price that would be affordable by that same 28% metric is $276,247 — a nearly impossible-to-overcome difference of more than $160,000 compared to the actual median home. 

For these calculations, Clever used a full 20% down payment, the minimum amount many loans require to avoid extra costs like mortgage insurance. However, real-world data shows that’s not always the case, especially for first-time buyers, who put down an average of just 9%. 

Lower down payments translate into higher monthly payments, meaning these buyers are faced with even more stark unaffordability. For example, those lucky enough to qualify for 0% down payment loans, such as those offered by the VA and USDA, would need to earn $147,602 to affordably buy the median American home.

Just Two U.S. Cities Offer Truly Affordable Homes for Local Earners

With an increasing portion of America’s population concentrated in big metros and their suburbs, the status of the 50 highest-population cities in the United States reveals a lot about the nation’s housing affordability — and the news isn’t good. 

Using the 28% metric and a 20% down payment, people making the local median income can only affordably buy a home in two U.S. metro areas: Detroit and Pittsburgh. Philadelphia, Cleveland, and Cincinnati come close, missing on affordability by $2,500 or less in annual income, meaning a slight change in interest rates or a slightly more buyer-friendly local housing market would make them affordable.  

1. Detroit

Those looking for truly affordable living better enjoy Motown music and Detroit-style pizza, as the Motor City offers a uniquely beneficial situation for budget-minded buyers.

Although Detroit’s median income of $72,574 is only about $5,000 shy of the nationwide median ($77,719), homes there sell for a median of just $195,000, well under half of the national average of $438,000.  

The area offers moderate property tax costs for the typical home at $1,809 annually, while Detroit’s typical homeowners insurance premium of $2,343 is also relatively affordable. 

Detroit also stands out for its deep affordability in other ways. For example, residents earning the median metro salary could affordably buy a home as expensive as $234,018, nearly $40,000 more than the city’s typical property.

Those looking to affordably buy a home with 0% down need to start shopping here as well, as Detroit is the only major U.S. metro where a household earning the local median income could do so, clearing the bar by $1,248.

2. Pittsburgh

Pittsburgh provides a similar situation to Detroit, a few hundred miles southeast. The metro boasts a median income of $72,532, close to the national median. Although typical homes cost $250,000 ($55,000 more than in Detroit), that’s still substantially lower than the nationwide level of $438,000. 

Typical local household annual incomes clear the bar for purchasing the average home by $1,315. Put another way, with a 20% down payment, Pittsburgh’s median household income would support purchases up to $254,617.

3. Philadelphia

Most people familiar with housing know the Northeast faces higher prices compared to the Midwest and South, a difficulty often moderated by the region’s generally higher local incomes. However, Philadelphia offers the best of both worlds.

The City of Brotherly Love has a median income of $86,867, nearly 12% higher than the national median ($77,719). However, the median home price of $290,000 is still far below the nationwide median – nearly $150,000 lower, a substantial sum that could make or break the prospect of homebuying for many. 

The typical Philadelphia household earns just $864 less than would be required to affordably buy the area’s median-priced home. Among the five most affordable cities, local incomes also support the highest affordable home price, $287,144. 

4.  Cleveland

Cleveland presents a common situation shared with many parts of the Midwest: lower-than-average incomes but appropriately lower home prices, too. Median earners in Cleveland bring home $67,586 per year (just 87% of the nationwide average), but that’s nearly enough to buy the median home at $235,000.

Median household income in Cleveland is only $1,564 less per year than would be required, a difference of only about $130 each month.

5.  Cincinnati

Rounding out the top five is Cincinnati, yet another Ohio city that exhibits the familiar phenomenon of reasonable salaries paired with very affordable homes.

In fact, Cincinnati stands out in this regard by actually having a median household income ($77,844) that’s higher than the national number ($77,719), while having a median home price that’s more than $140,000 below the national median ($294,000 versus $438,000).

Four More Cities Relatively Close to Affordability

Another four cities are less than $15,000 short of the median incomes residents would need to buy a typical home: 

• St. Louis ($4,071 short)
• Indianapolis ($6,259 short)
• Louisville ($10,634 short)
• Buffalo ($12,452 short)

Although the pickings are slim, those with a focus on making their salary stretch as far as possible housing-wise can at least take comfort in the fact that the most affordable cities based on local incomes are spread relatively widely across the country’s central and eastern regions.

Of the 10 most affordable cities when it comes to typical home prices and incomes, five are in the Midwest, two are in the South, and three are in the Northeast: 

1. Detroit, Michigan
2. Pittsburgh, Pennsylvania
3. Philadelphia, Pennsylvania
4. Cleveland, Ohio
5. Cincinnati, Ohio
6. St. Louis, Missouri
7. Indianapolis, Indiana
8. Louisville, Kentucky
9. Buffalo, New York
10. Oklahoma City, Oklahoma

California Home to the Four Least Affordable Cities

On the flip side, the four least affordable cities in our study are in California: San Jose, San Francisco, Los Angeles, and San Diego.

Typical households in those four California metros are each more than a jaw-dropping $100,000 shy of the median income required to buy the area’s median-priced home — even with a 20% down payment. This is despite the fact that median earners in each city make significantly more than the national average. However, home prices are even more elevated, leading to this stark unaffordability. 

Put another way, each of the bottom California cities requires more than twice the local median income to buy a typical home in the metro (with 20% down), ranging from 325% in San Francisco to 237% in San Diego. 

*Based on median home price and median income; **Based on median income with 20% down, using the 28% rule. 

Other cities with a six-figure income gap include New York ($138,235), Seattle ($119,635), Miami ($111,737), and Boston ($104,690).

One thing California has going for it is relatively moderate property taxes, held in check by the state’s sometimes-controversial Proposition 13, which limits increases for current homeowners. Supporters argue that it allows longtime owners to stay in their homes by maintaining rock-bottom assessments, while opponents contend that new buyers face sky-high taxes reflecting current prices, effectively subsidizing low rates on current owners. Therefore, the affordability picture can be significantly different for long-term vs. new homeowners in the Golden State. 

It’s not much better anywhere near California, either. The West is home to seven of the ten most unaffordable cities by median income and home price, with just two in the Northeast and one in the South: 

1. San Jose, California
2. San Francisco, California
3. Los Angeles, California
4. San Diego, California
5. New York, New York
6. Seattle, Washington
7. Miami, Florida
8. Boston, Massachusetts
9. Riverside, California
10. Denver, Colorado

Although the Golden State faces widespread unaffordability, Miami stands out compared to Florida as a whole. For the state of Florida overall, median earners are $55,194 per year short of buying the typical home, while those making the median income in Miami are $111,737 below the necessary amount.

Residents of Midwestern States Have Best Chance of Affording Typical Local Home

*Using the 28% rule and typical state homeowners insurance and property tax rates.

To be sure, life in the nation’s 50 largest metropolitan areas isn’t for everyone. Although those who prefer a suburban or rural lifestyle might expect the cost of living to be affordable, that’s not always the case in many states.

On a statewide basis, just one state is affordable using the 28% standard and 20% down, using local incomes and median house prices: Iowa. 

However, there’s not much room to spare, with Iowa median incomes reaching 98.6% of the amount required ($997 more than needed).  

Alongside Iowa, most of the others in the top five are also in the Midwest: Indiana (104.1% of median income needed), Ohio (107.1%), West Virginia (111.6%), and Missouri (111.9%). 

All benefit from median home prices substantially lower than the national median ($438,000), ranging from $239,000 in Iowa to $271,000 in Missouri. Notably, they also earn top spots even as median incomes in each of these states remain under the national average.  

The tax and insurance costs of these states are low, too. Indiana ($2,052), Iowa ($2,940), Missouri ($2,388), Ohio ($3,324), and West Virginia ($1,188) all provide savings to buyers with lower-than-average property tax costs compared to the nation overall ($3,803). Meanwhile, Ohio ($1,176), Indiana ($1,548), Iowa ($1,884), West Virginia ($840), and Missouri ($2,208) also offer lower homeowners insurance costs on a typical home than the national average of $3,400. 

More broadly, seven states come relatively close to affordability with income gaps under $10,000 on a 20% down, median-priced home purchase: 

1. Indiana ($2,825)
2. Ohio ($4,844)
3. West Virginia ($6,488)
4. Missouri ($8,170)
5. Michigan ($8,911)
6. Delaware ($9,085)
7. North Dakota ($9,679)

Unfortunately for those without substantial savings, no state has a median income that supports payments on a median-priced home with a zero-percent down payment. Iowa is closest, at $12,304 per year (or over $1,000 per month) short.

On the other end of the spectrum, there’s more geographic diversity in the least affordable states, which include California, Hawaii, New York, Washington, and Massachusetts. Median-earners in last-place California miss the mark for affordability by $133,487 with a 20% down payment on a typical home, over $30,000 more than No. 49 Hawaii ($97,203 short). 

A total of 11 states have median incomes of more than $50,000 less than buyers would need to buy the typical home with a full 20% down payment:

1. California: $133,487
2. Hawaii: $97,203
3. New York: $83,985
4. Washington: $82,714
5. Massachusetts: $82,602
6. Colorado: $81,238
7. Montana: $75,910
8. New Jersey: $64,950
9. Rhode Island: $57,869
10. Oregon: $55,877
11. Florida: $55,194

California would need to more than double its median income to 239.7% of current levels to reach affordability, the only state faced with such a profound predicament when putting down 20%. 

However, those taking out 0% down mortgages would need more than twice the median income to buy a typical home in ten states: 

1. California (289.6%)
2. Montana (248.8%)
3. Hawaii (246.9%)
4. New York (241.1%)
5. Washington (226.4%)
6. Colorado (224.8%)
7. Massachusetts (219.4%)
8. Florida (206.4%)
9. Oregon (205.6%)
10. Rhode Island (200.5%)

Based on current statewide household incomes and a 20% down payment, Mississippi would have the lowest price for a genuinely affordable home: $190,594, resulting from its last-place median income of $54,203. It’s followed by Louisiana, where a median income of $58,229 could affordably buy a $199,693 home, and Oklahoma, where affordable homes would sell for $203,638, based on a $62,138 median household income.

*Using the 28% rule and typical state homeowners insurance and property tax rates.

West Virginia Provides Best Value for Remote Workers, California Offers Worst

With a considerable number of Americans working remotely post-COVID, many have looked to take their big-city salaries and relocate to areas with lower costs of living. For this group, it’s worth examining where the salary required to own the average home is lowest in absolute terms.

On a statewide basis, this is West Virginia, where the state’s typical home can be purchased affordably (with a 20% down payment) with a household income of $62,436. That’s followed by Iowa ($70,436), Indiana ($72,302), Ohio ($72,613), and Louisiana ($73,190).

California is far and away the leader for the highest income required to buy the median home, $229,008. That’s around $35,000 more than the next highest, Hawaii ($192,525). Massachusetts ($182,460), Washington ($177,319), and Colorado ($174,149) also sit near the top of the list. 

*Using the 28% rule and typical state homeowners insurance and property tax rates.

When it comes to cities, Detroit remains in first place with a required income of $60,474 to buy the typical Motor City home. Cleveland takes second at $69,150, while Pittsburgh ($71,217), Louisville, Kentucky ($79,555), and Cincinnati, Ohio ($80,336) round out the top five.

Conversely, those moving to San Jose, California, would need to bring a $458,297 annual salary to buy the area’s median-priced home. Nearby San Francisco isn’t far behind at $415,871, followed by San Diego ($246,134), Los Angeles ($241,149), and New York ($233,455). 

*Using the 28% rule and typical state homeowners insurance and property tax rates.

Homeowners Insurance and Property Taxes Play a Significant Role in Affordability

Home insurance plays a large and increasingly important role in affordability across the country. Annual homeowners insurance on a median-priced home ranges from a paltry $834 in West Virginia (about $70 per month) to a jaw-dropping $7,392 in Florida (almost $620 monthly), a difference of more than 8x. 

This can have a dramatic effect on required salaries in states with similarly priced homes. For example, Delaware and Texas are fairly similar in terms of their median home price, at $359,000 and $348,000, respectively. However, homeowners insurance in Delaware costs just $1,154 annually, compared to $4,697 per year in Texas. 

As a result of this and other factors, the required income to buy a typical home with 20% down rises from $90,446 in Delaware to $111,144 in Texas. 

Property taxes are also a significant factor in determining affordability, varying widely depending on how a given state or municipality chooses to fund itself. 

An excellent example of this would be the difference between high-tax New Jersey and low-tax Utah. Utah’s median home price is actually higher than New Jersey’s ($563,000 vs. $549,000), yet property taxes there are less than a quarter of those in the Garden State ($2,646 vs $9,717).

Naturally, this creates a substantial gap in the salaries required to affordably own the typical home. Utah’s level of $143,275 is over $20,000 less than New Jersey’s ($164,731), despite median home prices being higher by about that same amount.

*Using the 28% rule with 20% down payment and typical state homeowners insurance and property tax rates.

The Impact of Maintenance Costs on Home Prices

Although not factored into our affordability calculations, it’s also vital for homeowners and would-be buyers to remember the cost of maintaining their property. Generally, it costs 1% to 4% of the home price to maintain a home. For a U.S. average median home sale price of $438,000, this would be $4,380 to $17,520.

Homeowners should expect these upkeep costs to be the highest in California (roughly $8,000 to $32,000 for a median-priced home) and Hawaii (about $7,500 to $30,000), as well as cities such as San Jose, California (roughly $15,000 to 60,000) and San Francisco (about $14,000 to $56,000). 

*Calculated using 1% to 4% of median home sales price.

*Calculated using 1% to 4% of median home sales price.

How Much House Can I Afford?

Methodology

Data sources for this study include the U.S. Census Bureau, the American Community Survey, the Federal Reserve, the U.S. Bureau of Economic Research, Redfin, Bankrate, Freddie Mac, and The Tax Foundation. Data analysis took place in April and May 2025.  Where data points were unavailable for specific geographic resolutions, data from higher resolutions was used as an estimate. 

About Clever

Since 2017, Clever Real Estate has been on a mission to make selling or buying a home easier and more affordable for everyone. 12 million annual readers rely on Clever’s library of educational content and data-driven research to make smarter real estate decisions—and to date, Clever has helped consumers save more than $190 million on realtor fees. Clever’s research has been featured in The New York Times, Business Insider, Inman, Housing Wire, and many more. 

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