--- title: The Income Needed to Buy a Typical Home Has Soared 80% Since 2020 description: Thanks to rising mortgage rates and home prices, the income needed to comfortably buy a home is over $100,000, according to Zillow. authors: - name: Pete Grieve role: Lead News Reporter url: https://money.com/author/pete-grieve/ bio: Pete Grieve is a personal finance reporter at Money who frequently covers news stories about housing topics including home buying, mortgage rates and homeowners insurance. education: University of Chicago, BA Political Science at_money_since: 2022 articles: 597 covers: - Housing - Banking - Business - Career Advice - Credit - Credit Cards - Debt - Economy and Politics - Education - Health and Wellness - Identity Theft - Insurance - Investing - Lifestyle - Loans - Mortgages - Personal Finance - Professional Services - Retirement - Shopping - Taxes social: - https://twitter.com/pete_grieve - https://linkedin.com/in/pete-grieve-b5aa02138 - https://www.facebook.com/petegrieve4 editors: - name: Brad Tuttle role: Senior Editor url: https://money.com/author/brad-tuttle/ bio: Brad Tuttle is a former senior editor at Money with over 10 years’ experience covering a vast number of personal finance topics, including careers, cars, travel, budgeting, investing, insurance, credit cards, consumer psychology, real estate, banking, and shopping and deals. education: Columbia University School of Journalism, MS at_money_since: 2014 articles: 366 covers: - Housing - Banking - Business - Career Advice - Credit - Credit Cards - Economy and Politics - Education - Health and Wellness - Identity Theft - Insurance - Investing - Lifestyle - Loans - Mortgages - Personal Finance - Pets - Professional Services - Retirement - Shopping - Taxes - Technology social: - https://twitter.com/bradrtuttle - https://linkedin.com/in/brad-tuttle-834b225 former_staff: true published: '2024-02-29T19:12:30.000Z' modified: '2024-02-29T19:12:30.000Z' section: Housing tags: - News word_count: 424 canonical: https://money.com/income-needed-to-buy-home-zillow/ type: NewsArticle source: structured-blocks --- > **Disclosure:** We may earn a fee if you click on the links below. Compensation does not determine ranking. Not all brands are included. [Learn more](https://money.com/page/disclaimer/). ![Illustration of a house on a really high hill and a person hiking up towards it.](https://img.money.com/2024/02/News-Income-Increase-Home-Affordability.jpg) The income needed to afford a typical home has increased by a staggering 80% in the past four years, highlighting just how much current home prices and [mortgage rates](https://money.com/current-mortgage-rates/) are straining buyers' budgets. Last month, homebuyers needed to make about $106,500 to afford the monthly mortgage payments for a typical home. That’s up from about $59,000 in January 2020, according to a [new report from Zillow](https://www.zillow.com/research/buyers-income-needed-33755/). Four years ago, most households could comfortably cover the monthly payments on a typical home because the median income was about $66,000. Incomes are much higher today, with the typical household bringing in about $81,000, according to Zillow’s estimates. However, that roughly 23% increase in median income isn't nearly enough to offset the $47,000 spike in what it takes to afford the typical home. The report’s calculation of the [income needed to afford a home](https://money.com/how-much-house-can-i-afford/) is based on the assumption you shouldn’t spend more than 30% of your income on your total monthly payments, which include [home insurance](https://money.com/best-home-insurance/), property taxes and maintenance. ## Why homes are so much less affordable With a 10% down payment, Zillow reports that the typical monthly mortgage payment was $2,188 in January, which is nearly double (up 96.4%) what it was four years ago. Much of that increase is due to the pandemic boom in home values, which are 42.4% higher than the January 2020 level. The other major element is mortgage rates: The current average rate on a 30-year fixed-rate loan is 6.9%, according to Freddie Mac. In January 2020, rates were around 3.5%. To cope with higher monthly payments, today’s homebuyers are relying on several strategies including renting out parts of their homes, moving to cheaper cities and even “cobuying” houses with friends, according to Zillow. Home prices could continue to rise in 2024, further challenging affordability. A [new Fannie Mae report](https://www.fanniemae.com/research-and-insights/surveys-indices/home-price-expectations-survey-hpes) forecasts a 3.8% increase in home prices this year, which is higher than the expectation last month of a 2.4% increase. "As the dearth of listings boosts both prevailing values and expected future prices, the affordability concerns of prospective homebuyers are unlikely to fade soon," Terry Loebs, founder of research firm Pulsenomics, said in the report. The one piece of good news is that Fannie Mae's panel of experts forecasts mortgage rates will fall to 6% by the end of the year. ![](https://s3.consumersadvocate.org/prd/image/image/26681/medium_57f09f10-efb8-487d-a73e-5f7d605144eb.png) Imagine finally owning your dream home — Rocket Mortgage (NMLS #3030) can help! [View Rates](https://money.com/pr/t39f99e0e0ab?ap_referrer=%2Fincome-needed-to-buy-home-zillow%2F) ```json { "@context": "https://schema.org", "@graph": [ { "@type": "BreadcrumbList", "@id": "https://money.com/income-needed-to-buy-home-zillow/#breadcrumb", "itemListElement": [ { "@type": "ListItem", "position": 1, "name": "Home", "item": "https://money.com" }, { "@type": "ListItem", "position": 2, "name": "Housing", "item": "https://money.com/housing/" }, { "@type": "ListItem", "position": 3, "name": "Home Buying", "item": "https://money.com/home-buying/" }, { "@type": "ListItem", "position": 4, "name": "The Income Needed to Buy a Typical Home Has Soared 80% Since 2020" } ] }, { "@type": "WebSite", "@id": "https://money.com/#website", "url": "https://money.com", "name": "Money", "publisher": { "@id": "https://money.com/#organization" } }, { "@type": "WebPage", "@id": "https://money.com/income-needed-to-buy-home-zillow/#webpage", "url": "https://money.com/income-needed-to-buy-home-zillow/", "name": "The Income Needed to Buy a Typical Home Has Soared 80% Since 2020", "isPartOf": { "@id": "https://money.com/#website" }, "datePublished": "2024-02-29T19:12:30.000Z", "mainEntity": { "@id": "https://money.com/income-needed-to-buy-home-zillow/" }, "inLanguage": "en-US", "breadcrumb": { "@id": "https://money.com/income-needed-to-buy-home-zillow/#breadcrumb" }, "dateModified": "2024-02-29T19:12:30.000Z" }, { "@type": "NewsArticle", "headline": "The Income Needed to Buy a Typical Home Has Soared 80% Since 2020", "articleSection": "Housing", "image": [ { "@type": "ImageObject", "url": "https://img.money.com/2024/02/News-Income-Increase-Home-Affordability.jpg", "width": 4933, "height": 3289, "caption": "News-Income-Increase-Home-Affordability" } ], "author": [ { "@type": "Person", "name": "Pete Grieve", "url": "https://money.com/author/pete-grieve/", "@id": "https://money.com/author/pete-grieve/#author", "description": "Pete Grieve is a personal finance reporter at Money who frequently covers news stories about housing topics including home buying, mortgage rates and homeowners insurance.", "image": "https://img.money.com/2023/02/peter.png?w=350&h=430&crop=1", "email": "peter.grieve@money.com", "jobTitle": "Lead News Reporter", "alumniOf": "University of Chicago, BA Political Science", "sameAs": [ "https://twitter.com/pete_grieve", "https://linkedin.com/in/pete-grieve-b5aa02138", "https://www.facebook.com/petegrieve4" ], "worksFor": { "@id": "https://money.com/#organization" } } ], "publisher": "https://money.com/#organization", "datePublished": "2024-02-29T19:12:30.000Z", "description": "Thanks to rising mortgage rates and home prices, the income needed to comfortably buy a home is over $100,000, according to Zillow.", "abstract": "Thanks to rising mortgage rates and home prices, the income needed to comfortably buy a home is over $100,000, according to Zillow.", "@id": "https://money.com/income-needed-to-buy-home-zillow/", "inLanguage": "en-US", "dateModified": "2024-02-29T19:12:30.000Z", "editor": [ { "@type": "Person", "name": "Brad Tuttle", "url": "https://money.com/author/brad-tuttle/", "@id": "https://money.com/author/brad-tuttle/#author", "description": "Brad Tuttle is a former senior editor at Money with over 10 years’ experience covering a vast number of personal finance topics, including careers, cars, travel, budgeting, investing, insurance, credit cards, consumer psychology, real estate, banking, and shopping and deals.\r\n\r\n", "image": "https://img.money.com/2014/01/Brad-Tuttle.png?w=226&h=247&crop=1", "alumniOf": "Columbia University School of Journalism, MS", "sameAs": [ "https://twitter.com/bradrtuttle", "https://linkedin.com/in/brad-tuttle-834b225" ] } ], "wordCount": 424, "keywords": [ "News" ], "about": [ { "@type": "Thing", "name": "Housing in the United States", "sameAs": [ "https://en.wikipedia.org/wiki/Housing_in_the_United_States" ] }, { "@type": "Thing", "name": "Real estate", "sameAs": [ "https://en.wikipedia.org/wiki/Real_estate" ] }, { "@type": "Thing", "name": "Mortgage", "sameAs": [ "https://en.wikipedia.org/wiki/Mortgage" ] } ] } ] } ```