The income needed to afford a median-priced home in the United States has climbed to $124,674 (€109,252) a year, according to the Federal Reserve Bank of Atlanta.
That is 44 per cent more than the country’s current median household income, the regional central bank’s Home Ownership Affordability Monitor (HOAM) showed.
The tool measures whether a household on the median income can cover the full cost of owning the median-priced home. It counts mortgage principal and interest at prevailing rates alongside property taxes, home insurance and private mortgage insurance.
Ownership is deemed unaffordable when those costs exceed 30 per cent of annual income, the benchmark used by the US Department of Housing and Urban Development (HUD). An index score below 100 means the typical household cannot afford the typical home.
By that measure, the national market has been unaffordable since February 2021, the Atlanta Fed said. Affordability fell by 25.2 per cent in the year to April 2022, the sharpest drop in records dating back to 2006.
Higher home prices and a steep rise in interest rates more than offset income gains, the bank said at the time. Inflation also blunted much of the benefit of higher wages, especially for middle and lower earners.
The gap is wider in some cities. In July 2025, a household in Nashville, Tennessee, needed about $138,000 (€120,929) a year to stay within the 30 per cent threshold, 54 per cent above the local median income, according to the Atlanta Fed.
A household on Nashville’s median income of about $90,500 (€79,305) would have had to spend 46 per cent of its earnings to own the median-priced home there. The city’s median sale price was 62 per cent higher than in July 2019, before the pandemic.
The squeeze on American buyers mirrors pressures across the European Union. The EU Agency for Fundamental Rights (FRA) said in its annual report on June 11 that house prices in the bloc rose 53 per cent between 2015 and 2024 while rents climbed by nearly 17 per cent.
The European Commission launched its first European Affordable Housing Plan on December 16, 2025. European Council President António Costa has described affordable housing as “one of the most urgent and complex problems for millions of Europeans”.
EU leaders were expected to return to the issue at an informal summit in Dublin in November, under Ireland’s presidency of the Council of the European Union. Housing remains primarily a national competence, with the main policy levers held by member states.
