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The 10 Most and Least Affordable Housing Markets in America Right Now

David Garner

Published On: June 2nd, 2025

🏡 The 10 Most (and Least) Expensive U.S. Housing Markets in 2025 — And What Salary You’ll Need to Afford Them

As home prices rise across the U.S., the gap between housing costs and income is widening. While mortgage payments have dipped slightly from last year, the salary required to buy a home in many cities has reached staggering levels.

In some places, you’ll need to earn over $270,000 per year just to afford a median-priced home.

Let’s break it down.👇

📊 Price vs. Income: The Affordability Gap is Growing

According to a 2024 Harvard University report:

🏠 Home prices grew 43% between 2019 and 2022
💵 Median incomes grew just 7%

That gap has put extreme pressure on affordability, especially in high-cost metro areas — most notably on the West Coast.

🔟 Most Expensive Housing Markets (2025)

These are the top 10 U.S. cities with the highest home prices and the income you’ll need to qualify for a mortgage, according to NAR (based on 10% down and 25% income-to-payment ratio):

🏘️ 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

⚠️ In these cities, even six-figure earners may struggle to afford a median home.

💸 10 Least Expensive Housing Markets (2025)

On the flip side, here are the most affordable major markets, based on income required to buy a home:

🏘️ City	💰 Income Needed	🏠 Median Home Price
Cleveland, OH	$22,062	$213,200
Pittsburgh, PA	$22,062	$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

✅ These cities offer relatively affordable entry points for buyers—many under $30,000 in qualifying income.

📉 Are Housing Costs Coming Down?

Not quite. According to Zillow (May 2025):

🏦 Monthly mortgage payments have fallen 1.3% YoY
But 🔺 home prices are still climbing in 80%+ of U.S. metros (NAR)

That means even small drops in rates aren’t offsetting the affordability squeeze for most buyers.

💡 How Much Should You Really Spend on Housing?

🧮 The 28% Rule of Thumb:

You should spend no more than 28% of your gross monthly income on housing costs.

For example:

💰 $10,000 monthly income = 🚪**$2,800 max housing costs**

This includes:

Mortgage payment (P&I)
Property taxes
Homeowner’s insurance
PMI (if <20% down)
HOA fees (if applicable)

🔄 Debt-to-Income (DTI) Matters Too

Most lenders cap your total DTI ratio between 41% and 51% of income (depending on loan type). That includes ALL debt payments, not just housing.

💬 “Qualifying is one part—affording it comfortably is another,” says Christine Covington of Golden 1 Credit Union.

🧠 Pro Tips from Mortgage Experts

🛡️ Avoid PMI if possible: PMI adds recurring cost to your mortgage if you put down <20%.

💡 Use a piggyback loan (80/10/10 structure) to avoid PMI.

🏦 Work with a savvy broker: Custom loan structures or built-in insurance can improve your terms.

💬 “A qualified mortgage broker knows the nuances that can save you thousands,” says Gloria Shulman of CenTek Capital Group.

🧭 Final Thoughts

Affording a home today isn’t just about your income—it’s about how you structure your financing, where you buy, and what trade-offs you’re willing to make.

Whether you’re eyeing a $200K home in Cleveland or a $2M property in San Jose, the key is understanding your numbers and your options.

For investors like me, I’m buying properties that cashflow today in the most affordable markets, and letting time do the heavy lifting for me.