Housing affordability in America is a tricky topic. What’s affordable for one family may be unattainable for another, and each situation is shaped by individual circumstances; car payments, child care, aging parents–the list goes on.
Ask 10 different banking professionals how to budget, you’ll likely get 10 different answers. However, financial advisors tend to agree on at least one rule when it comes to housing: it shouldn’t cost more than 28% of your gross monthly income, according to Bankrate.
But for the typical American household, how feasible is this? Zoocasa analyzed data from 225 cities across the U.S. to uncover how much monthly median income it takes to afford a mortgage payment. Here’s how the cities stack up.
Only 18 Cities Fall Below the 28% Income Threshold
Our report combines information from the National Association of REALTORS®, U.S. Census Bureau and Bankrate for 225 U.S. cities. Of those, only 18–or about 8%–would require households to put less than 28% of their monthly income toward a mortgage.
Similar to our piece on single homeowners, Illinois wins out on affordability, claiming four of the top five most affordable cities.
- Decatur, IL: average mortgage payment is 19.3% of median household income
- Peoria, IL: average mortgage payment is 21.6% of median household income
- Davenport-Moline-Rock Island, IA-IL: average mortgage payment is 22.1% of median household income
- Springfield, IL: average mortgage payment is 24.5% of median household income
The affordability of Illinois, alongside several of the other top 20, is due to their location. Many of these cities are in rural areas, where housing costs are generally lower due to less demand and slow population growth.
For example, although the Chicago area is also in Illinois, its median home price of $438,600 requires 39.5% of monthly median income to go toward the mortgage payment–that’s almost double what it’d take in Decatur or Peoria.
Ultimately, if median-earning homebuyers want to live closer to urban areas, many would have to cross that 28% threshold.
Breaking Down the Middle Majority
While 28% is the goal for many mortgage lending professionals, some lenders may accept up to a 43% debt-to-income (DTI) ratio, which accounts for all types of debt paid monthly. For someone without student loans or a car payment, broadening the search to 43% can open up over 100 more options, although lower DTIs tend to have better odds for mortgage approval, according to Bankrate.
Of the 225 metros analyzed, 130 fall between 28%-43% of income needed to afford a mortgage. While staying below 28% meant rural living for many median owners, several large metros open up in this range, such as:
- Minneapolis-St. Paul-Bloomington, MN-WI Metro Area: mortgage payment is 33.97% of median household income
- Dallas-Fort Worth-Arlington, TX Metro Area: mortgage payment is 34.47% of median household income
- Cincinnati, OH-KY-IN Metro Area: mortgage payment is 34.48% of median household income
- Atlanta-Sandy Springs-Roswell, GA Metro Area: mortgage payment is 35.32% of median household income
- Chicago-Naperville-Elgin, IL-IN Metro Area: mortgage payment is 39.5% of median household income
- Austin-Round Rock-San Marcos, TX Metro Area: mortgage payment is 39.59% of median household income
- Jacksonville, FL Metro Area: mortgage payment is 42.91% of median household income
What does this mean for buyers? For those bringing in median earnings, this means paying off other forms of debt like car payments or student loans may open up several more options for homebuying within your budget. Buyers should be careful, though–the 28% recommendation isn’t just for show. It builds in enough funds to have meaningful savings for any emergencies, which crossing the 28% threshold can hurt.
9 Cities Require at Least 70% of Median Income for a Mortgage
While compromises can be made up to the 43% range, there are some areas that are likely completely out of reach for median earners. Collectively, six of the nine least affordable metros are in California, while two are in Florida and the remaining metro is in Hawaii.
Ranking last in affordability is the San Jose-Sunnyvale-Santa Clara metro in California. At a median home price of over $2 million, a mortgage eats up 103.5% of a median earner’s income, meaning a median earner would likely go into debt each month just to cover the payment.
Urban Honolulu isn’t far behind at 91.2% of income going to a mortgage for a median-priced $1.2 million home, followed by San Francisco-Oakland-Fremont in California at 90.3% of income for a $1.5 million home.
The two Florida metros making their mark in this category are Naples-Marco Island at 78.4% and Miami-Fort Lauderdale-West Palm Beach at 70.5%.
For several of these cities, it’s not that median earnings are abnormally low. It’s more so that local home prices are abnormally high, which is typical of popular coastal areas, but still presents a major challenge for median earners when it comes to homeownership.
Overcoming The Income Divide
The data shows that higher median income doesn’t necessarily correlate with a smaller fraction going toward a mortgage payment. In other words, earning more than someone in another city doesn’t automatically make your mortgage payment more affordable.
For instance, in San Jose-Sunnyvale-Santa Clara, the median monthly household income is $13,509–that’s almost three times as much as Florence, South Carolina, the city with the lowest median earnings. But that’s not reflected in the mortgage burden–in Florence, a typical mortgage payment would cost earners 36% of their monthly wages. In San Jose, that number jumps to 103.5%.
Even in areas where earnings far exceed minimum wage, a typical mortgage payment is out of budget for many families. This means it’s important to consider not only cost, but location, expected wages, additional debt and long-term viability in your homebuying decision.
What Does This Mean For Homebuyers?
At the end of the day, median home prices and incomes are just that–the middle-ground. For each of these areas, there are people who earn well above the median wage, and well below.
Overall, this analysis is intended to make the picture of affordability clear for the typical worker in these areas, but every situation is unique.
Rural Illinois still stands out as an affordable entry point into the housing market, but it’s not without its tradeoffs. On the other hand, while homeownership may be out of reach for median earners in some larger coastal cities, typically these areas have plenty of options for renters at a lower price point.
Figuring out where to live is a big decision, but you don’t have to make it alone. Zoocasa has agents all across the country who can help. Reach out today for help on your journey.
Methodology
This analysis sourced data from the U.S. Census Bureau American Community Survey 2025 5-Year Estimates (S1901) for median household income alongside Q2 median prices from the National Association of REALTORS® Median Sales Price of Existing Single-Family Homes for Metropolitan Areas report. Bankrate’s “Mortgage calculator” tool was used to determine the expected mortgage payment for a median-priced home, using a 20% down payment, a Fair credit score (700-720), a 30-year loan term and a 7% interest rate.
