$100K Salary Isn’t Enough to Buy a Median Home in 2025
A six-figure income was once the golden benchmark of financial stability — especially for aspiring homeowners. Just a few years ago, making $100,000 per year could comfortably get you into a mid-range home, even in many major metro areas.
But by early 2025, that same salary doesn’t go as far. In fact, it may not be enough to buy a typical home in many parts of the U.S.
Let’s explore what’s changed — and more importantly, what you can do to adapt.
Home Prices Are Up, Mortgage Rates Are High
As of Q4 2024, the median U.S. home price was $420,700, according to the Federal Reserve Bank of St. Louis.
📊 Source: FRED Economic Data - Median Sales Price
Assuming a borrower with a $100,000 salary and a 7% mortgage rate, a 30-year fixed loan with 5% down only stretches to about $360,000–$370,000 in home value. That’s only about 85-88% of the national median home price.
Compare that to 2019, when the median home price was $313,000, and mortgage rates hovered around 3.75%. A $100K salary then could easily afford the median-priced home — and with much lower monthly payments.
Wages Are Growing — Just Not Fast Enough
Wages are rising. According to the Social Security Administration, the average wage index rose 4.43% in 2023.
📊 Source: SSA National Wage Index
But median home prices rose by 6.5% during the same time, based on FHFA House Price Index data.
📊 Source: FHFA HPI Q4 2024 Report
In other words, real estate appreciation is outpacing income growth — and that means every year, homes become less affordable, even for high earners.
Buyers Are Being Priced Out — Even With $100K Salaries
In 2023, the typical homebuyer had a household income of $108,900, the highest on record according to the National Association of Realtors. First-time buyers averaged $96,000.
📊 Source: NAR 2023 Buyer and Seller Report
Even as buyers earn more, they’re spending more just to access the same portion of the housing market — a sign that $100,000 is no longer enough for “typical” homes in most areas.
High Debt Levels Are Reducing Buying Power
It’s not just higher prices and rates — it’s also debt.
According to the Federal Reserve Bank of New York, U.S. credit card debt hit a record $1.13 trillion in Q3 2024.
📊 Source: New York Fed Household Debt Report
As debt payments increase, lenders reduce how much they’ll approve for a mortgage — even if your income is solid.
For example:
A $100K income equals roughly $8,333/month.
Without other debt, a borrower might qualify for a mortgage payment of up to $3,750/month.
But with $1,800 in monthly debt (common car loan, credit cards, student loans), they might only qualify for $1,950/month — nearly half as much.
At current rates, that drops a borrower’s potential home price from around $450,000 down to $200,000.
2025 Outlook: Will It Get Easier?
There is cautious optimism. According to Fannie Mae, home sales are projected to increase by 17% in 2026, with slow but steady recovery in affordability.
📊 Source: Fannie Mae Economic Forecast – Feb 2025
Meanwhile, Zillow’s chief economist, Skylar Olsen, says that more inventory and price cuts could benefit persistent buyers in 2025.
📊 Source: Zillow Market Outlook
However, interest rates are expected to remain above 6%, and core inflation continues to impact consumer costs.
How to Boost Affordability on a $100K Salary
1. Eliminate High-Impact Debt
Focus on debts with high monthly payments — not just high balances. Car loans, personal loans, and credit cards hurt your debt-to-income ratio the most.
Tip: Use the “avalanche method” — pay off highest interest + highest payment debts first.
2. Increase Your Down Payment
The more you put down, the better your interest rate and monthly payment. Lenders offer their best terms to borrowers who put down 20% or more.
Example: A 40% down payment can sometimes offset a lower credit score and still yield prime rates.
3. Explore FHA and Alternative Loan Programs
FHA loans allow debt-to-income ratios up to 57% and lower credit scores. They’re an option even for high earners with more debt or minimal down payment.
Also explore: VA loans, USDA loans, and non-QM mortgages if you have unique income or credit situations.
4. Check State and Local Down Payment Assistance Programs
Yes, you can qualify for assistance even with a six-figure salary.
Examples:
Missouri MHDC: Up to $144,480 income allowed depending on family size
🔗 https://www.mhdc.com/CalHFA (California): Income limits up to $222,200 in some areas
🔗 https://www.calhfa.ca.gov/TSAHC (Texas): Income limit up to 115% of area median income
🔗 https://www.tsahc.org/
5. Boost Your Income
Add a side hustle, overtime hours, or push for a raise. Just note: lenders typically require two years’ history for second jobs or self-employment income to count toward your mortgage application.
Conclusion: $100K Isn’t What It Used to Be — But You’re Not Out of Options
The homebuying landscape in 2025 is tough, but not impossible. While a $100,000 salary no longer guarantees access to a median-priced home, it still gives you leverage — if you optimize your finances.
Control what you can: eliminate debt, increase savings, explore alternative loan options, and take advantage of DPA programs.
Because while the market is unpredictable, your personal economy is something you can always improve.
