Here’s How Much You Need To Make To Buy A Typical Home In Metro Detroit

The income needed to afford a home declined in metro Detroit in April, according to a new Redfin analysis showing that home buying became slightly more affordable nationwide as mortgage rates eased and incomes rose.

Still, in many areas, buyers still needed a six-figure income to afford a typical home. A household needed to earn $116,780 a year to afford the median-priced U.S. home in April, down 2 percent from $119,191 a year earlier, Redfin said. It was the seventh straight month that the income needed to buy a home declined on a year-over-year basis.

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In metro Detroit, buyers had to earn $56,219 a year to afford the median-priced home in April, down 0.5 percent from the year prior. The typical household income in metro Detroit was $65,687, meaning a buyer would have to spend 25.7 percent of their annual income on housing. About 71.3 percent of the houses on the market in metro Detroit are affordable for typical residents.

According to Redfin, a home is considered affordable when a buyer’s monthly mortgage payments do not exceed 30 percent of their total income. The analysis assumes a 15 percent down payment and includes median home sale prices, prevailing mortgage rates and property taxes.

Nationally, a typical household would require 40 percent of its income to purchase a median-priced home, a decrease from the 42.4 percent required during the previous year.

The estimated median U.S. household income was $87,599 in April, about $29,000 less than the income needed to afford a typical home.

“Americans still need a six-figure income to afford a regular home, but it’s encouraging that affordability is gradually improving,” Redfin economist Grishma Bhattarai said in the report. Bhattarai said buyers may find more homes on the market and more room to negotiate, though rising mortgage rates could erase some recent affordability gains.

The average 30-year fixed mortgage rate was 6.33 percent in April, down from 6.73 percent a year earlier, Redfin said. But rates rose again in May, with the weekly average hitting 6.51 percent, meaning buyers locking in rates now may not see the same improvement.

The share of U.S. home listings affordable to a median-earning household rose to 32.9 percent in April, up from 28.7 percent a year earlier. That is still well below pre-2022 levels, when more than half of listings were typically affordable to the median-earning household.

Affordability improved in most of the largest U.S. metros Redfin analyzed. Chicago posted the largest year-over-year improvement, with buyers needing $101,075 to afford the median-priced home, down 13.3 percent. San Jose, California, and Seattle also saw notable improvement.

Some markets moved in the opposite direction. San Francisco had the highest income requirement among the metros Redfin analyzed, with buyers needing $443,979 to afford the median-priced home, up 7 percent from a year earlier. Redfin said home prices there have climbed partly because of the artificial intelligence boom.