The dream of homeownership may feel increasingly out of reach, especially with rising home prices and mortgage rates. According to a recent Realtor.com analysis, buyers now need an annual income of
Can You Still Afford a Home in 2025? Here's What You Need to Know
Dated: May 24 2025
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The dream of homeownership may feel increasingly out of reach, especially with rising home prices and mortgage rates. According to a recent Realtor.com analysis, buyers now need an annual income of at least $114,000 to afford a median-priced home in the U.S. This is a significant increase from 2019, when the required income was approximately $67,000.(Business Insider)
However, if your income is below this threshold, don't lose hope. There are still viable paths to homeownership in 2025.
Starter Homes: A More Accessible Option
While the median listing price was $431,250 in April 2025, starter homes offer a more affordable entry point into the housing market. These homes are typically smaller and less expensive. A January 2024 analysis by Realtor.com found that buyers need an income of approximately $70,164 to afford a typical starter home priced around $292,950. Depending on your local market, the required income may be even lower.(Business Insider)
Strategies for Lower-Income Buyers
If you're earning less than $100,000 annually, consider the following steps to make homeownership more attainable:(Business Insider)
Pay Down Existing Debt: Reducing debts like car loans or credit card balances can improve your debt-to-income ratio, making you a more attractive candidate for mortgage lenders.
Consult a Local Real Estate Agent Early: Real estate markets vary significantly by location. An experienced local agent can provide insights into affordable neighborhoods and properties that fit your budget.
Explore Financial Assistance Programs: Many states offer down payment assistance, closing cost grants, and special mortgage programs for first-time buyers. These can significantly reduce the upfront costs of purchasing a home.(Business Insider)
Broaden Your Search Criteria: Consider looking at condos, duplexes, or homes in less expensive areas. These options often come with lower price tags and can be excellent starting points for building equity.(Business Insider)
The Long-Term Benefits of Buying Now
Investing in a home can lead to substantial financial gains over time. Realtor.com estimates that home values could increase by 26% over five years and 57% over ten years. For example, a $200,000 home today could be worth $252,000 in five years and $314,000 in ten years. This appreciation can significantly boost your net worth and provide opportunities for future investments.(Business Insider)
Ready to Take the Next Step?
Navigating the housing market can be challenging, but you don't have to do it alone. If you're interested in starting the homebuying process or have questions about your options, feel free to reach out. I'm here to help you explore properties that align with your financial goals and guide you through every step of the journey.
Let's make your dream of homeownership a reality.
Cilia Miles
Passionate Realtor with a Heart for HomeHello! I'm Cilia Miles, and I'm not your typical real estate agent. With a diverse background in psychology and social work, I bring a unique perspective to the....
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