Is the 30% Rule Unattainable in 2025? Typical U.S. Household Needs to Spend ~45% of Income to Afford the Median-priced Home
Pittsburgh, Detroit, and St. Louis are the only affordable large metros, while buyers in Los Angeles potentially need to spend more than 100% of the median income on a home
AUSTIN, Texas, June 25, 2025 /PRNewswire/ -- In today's major housing markets, affordability isn't just strained, it's nearly extinct. According to a Realtor.com® Affordability Report, the typical U.S. household would need to spend 44.6% of their income to afford a median-priced home as of May 2025, well above the recommended 30% threshold. As high mortgage rates and home prices continue to weigh on affordability, only three of the top 50 metros are within financial reach for median-income earners: Pittsburgh, Detroit and St. Louis.
"Earnings have risen, but homebuying costs have risen faster, which means that adhering to affordability guidelines can feel challenging if not impossible in many housing markets across the country," said Danielle Hale, Chief Economist at Realtor.com®. "While a few Midwestern markets still offer a path to homeownership for the median-income household who can make a 20% down payment, in most large metros, the dream of owning a home remains out of financial reach without significant changes to either housing supply or interest rates."
Only Three Metros Pass the Affordability Test
Using a standard 20% down payment and May's average mortgage rate of 6.82%, just three major metros allow median-income earners to purchase a median-priced home without exceeding 30% of their income, Pittsburgh, Detroit and St. Louis.
Metro Area | May Median | Monthly with | Annual Mortgage | 2025 Median | Share of |
Pittsburgh, PA | $249,900 | $1,664 | $19,970 | $72,935 | 27.4 % |
Detroit-Warren-Dearborn, MI | $270,000 | $1,798 | $21,576 | $72,493 | 29.8 % |
St. Louis, MO-IL | $299,900 | $1,997 | $23,966 | $79,869 | 30.0 % |
These metros remain attractive to both buyers and investors due to their relatively low home prices, but sustained demand for low-priced homes threatens to erode affordability even in these strongholds.
"Detroit has always stood out for its affordability, and even with home prices rising, it remains one of the last major markets where median-income buyers still have a real shot at homeownership," said Anthony Djon, founder of Anthony Djon Luxury Real Estate. "That said, demand is picking up fast – especially in the lower price points. First-time buyers are moving with urgency because they know the window to buy affordably is narrowing."
The Coasts are Out of Reach
On the opposite end of the spectrum, the share of income required to afford a home in California's largest metros far exceeds the national norm. The story of California's lack of affordability isn't new, though the degree to which it is unaffordable may still come as a surprise. As of May 2025, the typical home in Los Angeles requires more than 104% of the area's median income, meaning the average household would be unable to cover annual housing costs, even with zero spending on anything else. Other metros including San Diego, San Jose, New York, and Boston also saw affordability ratios well above 60%.
Metro Area | May Median | Monthly with | Annual Mortgage | 2025 Median | Share of |
Los Angeles-Long Beach-Anaheim, CA | $1,195,000 | $7,958 | $95,496 | $91,380 | 104.5 % |
San Diego-Chula Vista-Carlsbad, CA | $995,000 | $6,626 | $79,513 | $103,066 | 77.1 % |
San Jose-Sunnyvale-Santa Clara, CA | $1,419,500 | $9,453 | $113,436 | $156,664 | 72.4 % |
New York-Newark-Jersey City, NY-NJ | $795,000 | $5,294 | $63,531 | $94,960 | 66.9 % |
Boston-Cambridge-Newton, MA-NH | $879,000 | $5,854 | $70,243 | $109,295 | 64.3 % |
That being said, perhaps, it doesn't come as a surprise that 51.0% of households in the Los Angeles area are renters, and just 49.0% of households own their own homes, compared to a homeownership rate of 65.1% nationally.
What will Make America Affordable Again?
There are a couple pathways to making housing more affordable; raise incomes or lower housing costs. While higher wages could help, big pay increases that are widespread can also boost housing demand, pushing home costs higher. Lower housing costs can be achieved, either by bringing down mortgage rates or home prices. Mortgage rates are not expected to move significantly from where they currently sit and recent economic uncertainty makes it harder to predict the mortgage rate path. So what can be done?
Build more affordable homes. Home prices remain stubbornly high in markets that are in-demand but face a growing home supply gap. In contrast, home prices have eased in many markets that have seen significant new construction activity over the last 5+ years. New home supply and new home construction, especially at affordable price points, can help relieve price pressure in tight housing markets.
National & 50 Largest Metro Data (Alphabetical)
Geography | May Median | Monthly | 2025 Median | Share of |
USA | $440,000 | $2,930 | $78,770 | 44.6 % |
Atlanta-Sandy Springs-Roswell, GA | $419,900 | $2,796 | $87,947 | 38.2 % |
Austin-Round Rock-San Marcos, TX | $525,000 | $3,496 | $102,412 | 41.0 % |
Baltimore-Columbia-Towson, MD | $399,999 | $2,664 | $95,068 | 33.6 % |
Birmingham, AL | $299,900 | $1,997 | $71,644 | 33.5 % |
Boston-Cambridge-Newton, MA-NH | $879,000 | $5,854 | $109,295 | 64.3 % |
Buffalo-Cheektowaga, NY | $299,900 | $1,997 | $71,055 | 33.7 % |
Charlotte-Concord-Gastonia, NC-SC | $450,000 | $2,997 | $81,514 | 44.1 % |
Chicago-Naperville-Elgin, IL-IN | $379,900 | $2,530 | $86,627 | 35.0 % |
Cincinnati, OH-KY-IN | $354,975 | $2,364 | $80,109 | 35.4 % |
Cleveland, OH | $275,000 | $1,831 | $68,695 | 32.0 % |
Columbus, OH | $389,900 | $2,597 | $80,469 | 38.7 % |
Dallas-Fort Worth-Arlington, TX | $440,000 | $2,930 | $88,783 | 39.6 % |
Denver-Aurora-Centennial, CO | $600,000 | $3,996 | $106,833 | 44.9 % |
Detroit-Warren-Dearborn, MI | $270,000 | $1,798 | $72,493 | 29.8 % |
Grand Rapids-Wyoming-Kentwood, MI | $399,900 | $2,663 | $82,065 | 38.9 % |
Hartford-West Hartford-East Hartford, CT | $469,450 | $3,126 | $94,838 | 39.6 % |
Houston-Pasadena-The Woodlands, TX | $372,500 | $2,481 | $78,845 | 37.8 % |
Indianapolis-Carmel-Greenwood, IN | $331,500 | $2,208 | $79,724 | 33.2 % |
Jacksonville, FL | $405,000 | $2,697 | $81,893 | 39.5 % |
Kansas City, MO-KS | $410,073 | $2,731 | $80,127 | 40.9 % |
Las Vegas-Henderson-North Las Vegas, NV | $484,999 | $3,230 | $72,504 | 53.5 % |
Los Angeles-Long Beach-Anaheim, CA | $1,195,000 | $7,958 | $91,380 | 104.5 % |
Louisville/Jefferson County, KY-IN | $326,990 | $2,178 | $72,566 | 36.0 % |
Memphis, TN-MS-AR | $350,000 | $2,331 | $66,946 | 41.8 % |
Miami-Fort Lauderdale-West Palm Beach, FL | $510,000 | $3,396 | $74,274 | 54.9 % |
Milwaukee-Waukesha, WI | $399,500 | $2,660 | $74,222 | 43.0 % |
Minneapolis-St. Paul-Bloomington, MN-WI | $446,000 | $2,970 | $96,855 | 36.8 % |
Nashville-Davidson--Murfreesboro--Franklin, TN | $548,950 | $3,656 | $85,166 | 51.5 % |
New York-Newark-Jersey City, NY-NJ | $795,000 | $5,294 | $94,960 | 66.9 % |
Oklahoma City, OK | $329,875 | $2,197 | $71,503 | 36.9 % |
Orlando-Kissimmee-Sanford, FL | $429,900 | $2,863 | $74,895 | 45.9 % |
Philadelphia-Camden-Wilmington, PA-NJ-DE-MD | $385,000 | $2,564 | $88,483 | 34.8 % |
Phoenix-Mesa-Chandler, AZ | $525,000 | $3,496 | $87,718 | 47.8 % |
Pittsburgh, PA | $249,900 | $1,664 | $72,935 | 27.4 % |
Portland-Vancouver-Hillsboro, OR-WA | $610,707 | $4,067 | $94,748 | 51.5 % |
Providence-Warwick, RI-MA | $595,000 | $3,962 | $85,421 | 55.7 % |
Raleigh-Cary, NC | $456,695 | $3,041 | $98,138 | 37.2 % |
Richmond, VA | $460,000 | $3,063 | $87,394 | 42.1 % |
Riverside-San Bernardino-Ontario, CA | $600,000 | $3,996 | $86,146 | 55.7 % |
Sacramento-Roseville-Folsom, CA | $639,000 | $4,255 | $93,641 | 54.5 % |
San Antonio-New Braunfels, TX | $340,000 | $2,264 | $73,281 | 37.1 % |
San Diego-Chula Vista-Carlsbad, CA | $995,000 | $6,626 | $103,066 | 77.1 % |
San Francisco-Oakland-Fremont, CA | $998,800 | $6,651 | $133,542 | 59.8 % |
San Jose-Sunnyvale-Santa Clara, CA | $1,419,500 | $9,453 | $156,664 | 72.4 % |
Seattle-Tacoma-Bellevue, WA | $799,000 | $5,321 | $113,456 | 56.3 % |
St. Louis, MO-IL | $299,900 | $1,997 | $79,869 | 30.0 % |
Tampa-St. Petersburg-Clearwater, FL | $417,500 | $2,780 | $73,079 | 45.7 % |
Tucson, AZ | $398,000 | $2,650 | $67,909 | 46.8 % |
Virginia Beach-Chesapeake-Norfolk, VA-NC | $415,000 | $2,764 | $80,312 | 41.3 % |
Washington-Arlington-Alexandria, DC-VA-MD-WV | $634,900 | $4,228 | $123,209 | 41.2 % |
Methodology: Monthly payment assumes May 2025 average Freddie Mac mortgage rate (6.82%), 20% down payment and a tax and insurance rate of 1.72% annually. 'Affordable' refers to the 30% rule-of-thumb, which suggests that households should spend 30% or less of their annual income on housing. The median household is a 2025 estimate based on the latest Census data. Median listing prices are from May 2025.
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