Introduction to Home Affordability in the US
A recent report analyzing the minimum income it takes to buy a home across America has revealed that Texans have it easier than residents of other states, but the dream may still feel unattainable for many. Potential homebuyers need to make at least $99,000 to buy a home in Texas in 2025, according to the analysis from Realtor.com. This amount is significantly higher than the median household income in Texas, which is $75,780, resulting in an affordability gap of more than $23,000.
Understanding the Affordability Gap
To determine the minimum income a local resident would need to make to buy a home in their own state, Realtor.com calculated each state’s "affordability gap" by finding the difference in the actual annual income from the minimum recommended income to afford a median-priced home as of July 2025. The report also determined the percentage difference between the affordability gap figure and state’s median actual income. Texas joined 18 other states where the minimum income required to purchase a home is just under the six-figure range.
State-by-State Comparison
According to the report, Iowa is the No. 1 most affordable state for homebuyers in 2025, with residents needing to make at least $76,422 to afford a median-priced home in the state. The median list price for an Iowa home in July came out to $289,938, and the median income of an Iowa household is just under $76,000, making Iowa’s affordability gap the smallest out of all 50 states at only $431. On the opposite end, Montana is the No. 1 least affordable state for homebuyers with an affordability gap surpassing $99,000.
Top 10 Most Affordable States
Realtor.com’s top 10 most affordable states for homebuyers in 2025, plus the minimum income needed to afford a median-priced home, are:
- No. 1 – Iowa ($76,422)
- No. 2 – Illinois ($85,196)
- No. 3 – Kansas ($74,030)
- No. 4 – Ohio ($76,425)
- No. 5 – Indiana ($81,565)
- No. 6 – Pennsylvania ($85,662)
- No. 7 – Missouri ($81,973)
- No. 8 – West Virginia ($71,167)
- No. 9 – Minnesota ($105,169)
- No. 10 – Michigan ($83,542)
Challenges in Home Affordability
The report highlights that even as the summer housing market is gradually turning more buyer-friendly, the typical American still does not earn enough to keep up with monthly mortgage payments without becoming house-poor. However, the degree of unaffordability varies widely across states. Overall, it has moderately edged down compared with the end of last year. The median list price of a home in Houston-Pasadena-The Woodlands was $370,000 last month, which is 0.5 percent lower year-over-year from July 2024.
Conclusion
In conclusion, while Texas may have a relatively lower minimum income requirement for homebuyers compared to other states, the affordability gap remains a significant challenge for many potential homebuyers. The report emphasizes the need for potential homebuyers to carefully consider their financial situation and the affordability of homes in their state before making a purchase. With the median household income in Texas being $75,780 and the minimum income required to buy a home being $99,000, it is clear that home affordability remains a pressing issue in the US, with varying degrees of severity across different states.
