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Where Can Americans Afford to Buy a Home in 2025? These Are the 10 Most – and Least – Affordable U.S. Housing Markets

For Americans that have been house-hunting recently, most have probably had one of two reactions: a sense of sticker shock in some cities, or a sigh of relief in others. With home prices continuing to outpace income growth in much of the country, affordability has become a hot topic, and for good reason.

According to Harvard’s Joint Center for Housing Studies, home prices nationwide jumped 43% from 2019 to 2022, while median incomes crept up just 7%. That gap has only grown in some regions – especially on the West Coast – where housing costs are pushing new limits.

For us investors, housing affordability is a fundamental metric that helps us to identify potential investment opportunities, so on face value that might not be good news.

And yet, there are still pockets of affordability (and opportunity). Here’s a look at the most and least expensive housing markets in the U.S. today, and what kind of paycheck a buyer needs to comfortably buy a home there.

Related: Growing Housing Affordability Gap Creating Golden Opportunity for Investors

🏠 Where Housing Is Most Expensive – and How Much You’d Need to Earn

In some cities, owning a home has become almost synonymous with having a six-figure salary. Using data from the National Association of Realtors (NAR), here are the top 10 priciest metro areas based on median home prices, and the annual income homebuyers need to afford them with a 10% down payment:

City	Income Needed	Median Home Price
San Jose, CA	$272,533	$2,020,000
San Francisco, CA	$236,814	$1,320,000
San Diego, CA	$180,151	$1,036,500
Los Angeles, CA	$162,034	$862,600
Seattle, WA	$150,992	$772,900
San Antonio, TX	$136,420	$300,000
Sacramento, CA	$135,392	$550,000
Boston, MA	$131,342	$734,000
New York, NY	$122,896	$779,300
Portland, OR	$120,018	$591,200

📌 Note: NAR calculates “qualifying income” using a conservative standard – assuming mortgage payments (principal + interest) shouldn’t exceed 25% of annual gross income.

Related: US Mortgage and Refinance Rates May 22nd 2025

💵 The Most Affordable Housing Markets in the U.S.

Now for the good news. Yes, there are still cities where you can buy a home without needing a tech salary or a trust fund. These are the 10 most affordable major metro areas based on the same methodology:

City	Income Needed	Median Home Price
Cleveland, OH	$22,062	$213,200
Pittsburgh, PA	$23,134	$225,400
Cincinnati, OH	$24,099	$293,900
Detroit, MI	$26,829	$254,200
St. Louis, MO	$29,032	$262,100
Kansas City, MO	$29,088	$328,700
Memphis, TN	$29,641	$276,100
Buffalo, NY	$30,105	$245,900
Indianapolis, IN	$31,367	$316,200
Columbus, OH	$31,422	$321,800

It’s worth noting that most of these more affordable cities are in the Midwest, where home prices have risen more slowly and incomes tend to be more in sync with local housing markets.

Related: 10-Year US Interest Rate Forecast from the Experts

🧮 How Much Should You Actually Spend on Housing?

You’ve probably heard of the 28% rule. That’s the general recommendation that your housing expenses shouldn’t exceed 28% of your gross monthly income. That includes your mortgage, property taxes, homeowners insurance, and any HOA fees or mortgage insurance.

So, for someone earning $10,000 a month, that would translate to about $2,800 in monthly housing costs.

But lenders look at more than just that one ratio. Most mortgage lenders also consider a buyers debt-to-income ratio (DTI) which compares your total monthly debts to your income. Depending on the loan type, lenders may allow a DTI of up to 51%.

That can make it difficult to get approved for the right loan amount if you’re carrying a bunch of other debt like credit cards or car loans – which most American do.

💡 Alternative Mortgages for International Property Investors

For us foreigners, there are other mortgage loan products that are more suitable for purchasing investment properties.

I use DSCR loans to buy all my rentals. They offer loan-to-values up to 7%, and 30-year fixed interest rates as low as 6.75% (with a rate buydown). But the best part? No proof of income, no credit checks, and no debt to income requirements!

That means as long as I can find a property that cashflows, I can get financed, even while American buyers are having to sit it out. So I’m out there snapping up bargains by negotiating better deals with impatient sellers.

Related: Dave Ramseys Predictions for US Mortgage Rates in 2025

🏡 Final Thoughts: Navigating the US Housing Market in 2025

Yes, affordability remains a major hurdle in many cities, but understanding regional variation can help buyers and investors make smarter choices.

Investing is the best property US markets where house prices align with incomes makes sense. Understanding local market affordability will go a long way in helping you to identify the best investment opportunities.

My advice? Work with an experienced real estate professional who can tailor an acquisition and financing strategy to fit your your financial profile and investing goals.

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