Here’s How Much You Need To Make To Buy A Typical Home in Suburban Philly

The income needed to afford a home rose in the Philadelphia metro area in April, according to a new Redfin analysis, as younger generations continue to be disenfranchised from home ownership.

In the Philly region, buyers needed to earn $85,541 a year to afford the median-priced home in April, up 5.7 percent from the year prior.

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The average household income in suburban Philly was $75,254, meaning a buyer would have to spend 34 percent of their annual income on housing. Just under half (47 percent) of the houses on the market in the Philly metro are affordable for average residents.

In many other 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. The good news for prospective buyers is that it was the seventh straight month that the income needed to buy a home declined on a year-over-year basis.

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.

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.