- Americans need an annual income of $117,000 to afford the typical home for sale. That’s 82% more than they need for the typical rental, up from 73% more last year. The gap is widening because home prices are rising faster than rents.
- The gap is widening most in Salt Lake City and Austin, and shrinking most in Cincinnati and Providence.
Americans need to earn $116,633 per year to afford the median priced home for sale. That’s 81.8% more than the $64,160 they need to afford the typical apartment for rent—and the gap has been widening.
Last year, someone needed to earn $110,808 to afford the typical U.S. home for sale—73.1% more than the $64,000 needed for the typical rental. Two years ago, they needed to earn $101,341 to afford the typical home for sale—54.5% more than the $65,600 required for the typical rental. And back in 2021, they needed to earn $63,925 to afford the typical home for sale—just 17.3% more than the $54,520 required for the typical rental.
We consider a home affordable if a buyer taking out a mortgage spends no more than 30% of their income on their monthly housing payment. This is based on a Redfin analysis of median home sale prices and median asking rents covering rolling three-month periods, along with prevailing mortgage rates and property-tax payments. This report focuses on the three months ending Feb. 28, 2025 (referred to as “February”)—the most recent period for which data is available—and comparable periods in past years.
The cost of buying a home is rising faster than the cost of renting, which is why there’s a growing gap between the income someone needs to afford their own home versus an apartment. The median home-sale price rose 4.5% year over year to $423,892 in February, and has been growing at roughly that pace for months. Plus, the average 30-year-fixed mortgage rate is hovering above 6.5%—more than double the record low hit during the pandemic. The typical U.S. household earns an estimated $86,382—roughly $30,000 less than the income required to afford the typical home for sale.
Meanwhile, the median asking rent rose just 0.2% year over year to $1,604 in February. Rents have stabilized below their record high because an influx of newly-built apartments ushered in by the pandemic construction boom has given renters more options. That has made it harder for landlords to boost rents. Supply in the for-sale market is more constrained—partly due to the mortgage-rate lock-in effect—which is fueling bidding wars and larger price increases.
Back in 2020 and 2021, rents were skyrocketing and mortgage rates hit record lows, which is why the income needed to afford a home was only about 17% higher than the income needed to afford an apartment.
“It has become increasingly challenging for American renters to make the shift to homeownership thanks to the triple whammy of rising home prices, high mortgage rates and a shortage of houses for sale,” said Redfin Senior Economist Elijah de la Campa. “The gap between what someone must earn to buy versus rent may shrink in the coming months, but only because rents are expected to rise as the number of new apartments hitting the market tapers off due to a construction slowdown.”
It’s worth noting that homebuyers, sellers and renters may face an extended period of economic uncertainty due to President Trump’s newly announced tariffs. The tariffs could lead to some mortgage rate relief, but that’s not guaranteed. They are expected to bring higher construction costs, higher home prices, higher unemployment and slower economic growth.
Salt Lake City and Austin See Biggest Jumps in Homebuying Premium
In Salt Lake City, someone needs an annual income of $140,412 to afford the typical home for sale. That’s 134% more than they need to afford the typical rental. By comparison, they only would have needed to earn 106% more last February. That 28-percentage-point increase is the largest increase among the 42 core-based statistical areas (CBSAs) Redfin analyzed.
Next came Austin, TX (+24.6 ppts to 143%), San Diego (+21.7 ppts to 127%), New York (+20.7 ppts to 76%) and Los Angeles (+20.7 ppts to 141%).
In most of these places, asking rents are falling while home prices are rising, which is why the gap is widening. Take Salt Lake City, for example. Asking rents in the Utah capital fell 7.8% year over year in February—the second biggest decline among the places Redfin analyzed (Austin was first, with a 10.1% drop)—while home prices rose 4.3%.
Rents are falling sharply in pandemic boomtowns including Austin because a lot of new apartments have been hitting the market. And home prices are rising sharply in big cities like New York as major urban areas make a comeback.
| CBSA | Y/Y change in median home sale price | Y/Y change in median asking rent |
| Salt Lake City, UT | 4.3% | -7.8% |
| Austin-Round Rock-Georgetown, TX | -1.3% | -10.1% |
| San Diego-Chula Vista-Carlsbad, CA | 3.4% | -5.7% |
| New York-Newark-Jersey City, NY-NJ-PA | 8.6% | -4.5% |
| Los Angeles-Long Beach-Anaheim, CA | 7.1% | -1.6% |
Cincinnati and Providence See Biggest Drops in Homebuying Premium
In Cincinnati, someone needs an annual income of $80,752 to afford the typical home for sale. That’s 38.9% more than they need to afford the typical rental. By comparison, they would have needed to earn 47.7% more last February. That 8.7-percentage-point decrease is the largest increase among the CBSAs Redfin analyzed.
Only five other CBSAs saw decreases: Providence, RI (-7.5 ppts to 57.6%), Washington, D.C. (-5.7 ppts to 88%), Baltimore (-5 ppts to 63.8%), Louisville, KY (-4.7 ppts to 43.2%) and Sacramento, CA (-1.3 ppts to 98%).
In all of these places, rents are rising faster than home prices, which is why the gap is shrinking. In Cincinnati, the median asking rent jumped 15.3% year over year in February—the biggest jump among the places Redfin analyzed and roughly double the 7.8% gain in the local median sale price.
| CBSA | Y/Y change in median home sale price | Y/Y change in median asking rent |
| Cincinnati, OH-KY-IN | 7.8% | 15.3% |
| Providence-Warwick, RI-MA | 6.7% | 12.2% |
| Washington-Arlington-Alexandria, DC-VA-MD-WV | 4.2% | 8.1% |
| Baltimore-Columbia-Towson, MD | 5.3% | 9.1% |
| Louisville/Jefferson County, KY-IN | 3.6% | 8.2% |
| Sacramento-Roseville-Folsom, CA | 2.8% | 4.4% |
“The increase in rents is definitely having an impact on the for-sale market—a lot of people are looking to buy instead of rent, and many of those people are first-time homebuyers in their mid-to-late twenties,” said Cody Brownfield, a Redfin Premier real estate agent in Cincinnati. “There are a lot of new apartment complexes here, but not enough to keep up with demand, which is one reason rents have been rising. Plus, a lot of new apartments are expensive because they’re in luxury buildings, so many people figure they can get more bang for their buck by buying.”
The Bay Area Has the Biggest Homebuying Premium; Pittsburgh Has the Smallest
In San Jose, CA, someone needs an annual income of $408,557 to afford the typical home for sale. That’s 218% more than they need to afford the typical apartment for rent—the biggest premium among the CBSAs Redfin analyzed. Next come San Francisco (176%), Seattle (145%), Austin (143%) and Los Angeles (141%).
Most of these places are West Coast tech hubs that have long been known as expensive. The $408,557 someone must earn to afford the typical San Jose home for sale is the highest in the nation. Someone in San Jose must earn $128,580 to afford the typical apartment for rent. That’s also the highest in the country, but pales in comparison to the income needed to buy a home in San Jose.
Of note is that New York also has a reputation for being expensive, but is not in the top five list above. That’s because there isn’t as big of a gap between rents and home prices. Someone in New York needs to earn $199,708 to afford the typical home for sale—76% more than the $113,440 they need to afford the typical apartment. New York is the sixth most expensive place to buy a home, but the second most expensive place to rent an apartment.
In Pittsburgh, someone needs an annual income of $66,350 to afford the typical home for sale. That’s just 14.4% more than they need to earn to afford the typical apartment for rent—the smallest premium among the CBSAs Redfin analyzed. Next come Cleveland (29.7%), Detroit (30.7%), Cincinnati (38.9%) and Philadelphia (40.9%). Most of these are among the most affordable places to buy a home in the country.
CBSA Summary: Three Months Ending Feb. 28, 2025
The table below includes 42 of the 50 most populous U.S. CBSAs—those for which Rent. and Redfin have sufficient rental data. The national figures are based on data for the entire U.S.
| CBSA | Income required to afford typical home for sale | Y/Y change: Income required to afford typical home for sale | Income required to afford typical apartment for rent | Y/Y change: Income required to afford typical apartment for rent | Income premium required to afford typical home over typical apartment | Y/Y change: Income premium required to afford typical home over typical apartment | Median home sale price | Median asking rent |
|---|---|---|---|---|---|---|---|---|
| Atlanta-Sandy Springs-Alpharetta, GA | $107,145 | 2.4% | $61,000 | 0.7% | 75.6% | 3.0 ppts | $385,868 | $1,525 |
| Austin-Round Rock-Georgetown, TX | $135,841 | 0.1% | $55,960 | -10.1% | 142.7% | 24.6 ppts | $433,160 | $1,399 |
| Baltimore-Columbia-Towson, MD | $104,769 | 5.9% | $63,960 | 9.1% | 63.8% | -5.0 ppts | $370,209 | $1,599 |
| Boston-Cambridge-Newton, MA-NH | $197,861 | 7.9% | $108,600 | 6.1% | 82.2% | 3.1 ppts | $699,400 | $2,715 |
| Buffalo-Cheektowaga, NY | $76,870 | 6.2% | $51,800 | 4.0% | 48.4% | 3.1 ppts | $243,928 | $1,295 |
| Charlotte-Concord-Gastonia, NC-SC | $105,974 | 3.8% | $59,360 | 1.0% | 78.5% | 5.0 ppts | $393,532 | $1,484 |
| Cincinnati, OH-KY-IN | $80,752 | 8.5% | $58,120 | 15.3% | 38.9% | -8.7 ppts | $284,215 | $1,453 |
| Cleveland-Elyria, OH | $66,135 | 11.3% | $51,000 | 9.0% | 29.7% | 2.7 ppts | $218,951 | $1,275 |
| Columbus, OH | $93,826 | 4.1% | $56,000 | 2.6% | 67.5% | 2.3 ppts | $324,038 | $1,400 |
| Dallas-Fort Worth-Arlington, TX | $121,538 | 2.9% | $57,960 | -5.8% | 109.7% | 17.8 ppts | $395,565 | $1,449 |
| Denver-Aurora-Lakewood, CO | $155,717 | 4.0% | $67,200 | -1.1% | 131.7% | 11.3 ppts | $580,719 | $1,680 |
| Detroit-Warren-Dearborn, MI | $70,584 | 5.0% | $54,000 | 1.9% | 30.7% | 3.9 ppts | $248,109 | $1,350 |
| Houston-The Woodlands-Sugar Land, TX | $102,915 | 2.3% | $49,400 | -2.0% | 108.3% | 8.8 ppts | $329,645 | $1,235 |
| Indianapolis-Carmel-Anderson, IN | $80,903 | 3.9% | $55,880 | 3.5% | 44.8% | 0.5 ppts | $299,675 | $1,397 |
| Jacksonville, FL | $102,717 | 1.4% | $58,120 | -6.9% | 76.7% | 14.4 ppts | $369,550 | $1,453 |
| Las Vegas-Henderson-Paradise, NV | $115,990 | 4.5% | $59,440 | 2.5% | 95.1% | 3.8 ppts | $439,301 | $1,486 |
| Los Angeles-Long Beach-Anaheim, CA | $265,481 | 7.6% | $110,000 | -1.6% | 141.3% | 20.7 ppts | $985,041 | $2,750 |
| Louisville/Jefferson County, KY-IN | $72,529 | 4.7% | $50,640 | 8.2% | 43.2% | -4.7 ppts | $261,882 | $1,266 |
| Memphis, TN-MS-AR | $74,353 | 6.0% | $48,760 | 4.0% | 52.5% | 2.9 ppts | $276,266 | $1,219 |
| Miami-Fort Lauderdale-Pompano Beach, FL | $151,039 | 14.3% | $96,400 | 1.5% | 56.7% | 17.6 ppts | $512,629 | $2,410 |
| Minneapolis-St. Paul-Bloomington, MN-WI | $107,475 | 6.2% | $61,000 | -5.9% | 76.2% | 20.0 ppts | $377,345 | $1,525 |
| Nashville-Davidson--Murfreesboro--Franklin, TN | $120,300 | 2.6% | $61,200 | -2.9% | 96.6% | 10.5 ppts | $459,176 | $1,530 |
| New York-Newark-Jersey City, NY-NJ-PA | $199,708 | 8.2% | $113,440 | -4.5% | 76.0% | 20.7 ppts | $675,322 | $2,836 |
| Orlando-Kissimmee-Sanford, FL | $111,667 | 2.8% | $69,400 | -2.1% | 60.9% | 7.6 ppts | $401,960 | $1,735 |
| Philadelphia-Camden-Wilmington, PA-NJ-DE-MD | $105,417 | 6.9% | $74,800 | 1.1% | 40.9% | 7.7 ppts | $358,656 | $1,870 |
| Phoenix-Mesa-Chandler, AZ | $121,886 | 4.4% | $59,000 | -1.7% | 106.6% | 11.9 ppts | $466,509 | $1,475 |
| Pittsburgh, PA | $66,350 | 9.0% | $58,000 | 1.0% | 14.4% | 8.3 ppts | $227,762 | $1,450 |
| Portland-Vancouver-Hillsboro, OR-WA | $150,695 | 3.3% | $70,000 | -5.2% | 115.3% | 17.7 ppts | $540,231 | $1,750 |
| Providence-Warwick, RI-MA | $135,648 | 7.1% | $86,060 | 12.2% | 57.6% | -7.5 ppts | $477,895 | $2,152 |
| Raleigh-Cary, NC | $118,397 | 4.1% | $56,800 | -3.7% | 108.4% | 15.7 ppts | $433,658 | $1,420 |
| Richmond, VA | $105,530 | 6.0% | $62,720 | 1.2% | 68.3% | 7.6 ppts | $389,990 | $1,568 |
| Riverside-San Bernardino-Ontario, CA | $161,182 | 6.6% | $93,000 | 1.2% | 73.3% | 8.8 ppts | $588,006 | $2,325 |
| Sacramento-Roseville-Folsom, CA | $158,682 | 3.7% | $80,160 | 4.4% | 98.0% | -1.3 ppts | $576,111 | $2,004 |
| St. Louis, MO-IL | $72,094 | 8.3% | $50,120 | -2.9% | 43.8% | 14.8 ppts | $253,926 | $1,253 |
| Salt Lake City, UT | $140,412 | 4.7% | $59,960 | -7.8% | 134.2% | 28.0 ppts | $525,667 | $1,499 |
| San Diego-Chula Vista-Carlsbad, CA | $241,218 | 4.3% | $106,200 | -5.7% | 127.1% | 21.7 ppts | $889,688 | $2,655 |
| San Francisco-Oakland-Berkeley, CA | $296,984 | 3.8% | $107,720 | -2.1% | 175.7% | 15.6 ppts | $1,080,775 | $2,693 |
| San Jose-Sunnyvale-Santa Clara, CA | $408,557 | 8.2% | $128,580 | 2.6% | 217.7% | 16.6 ppts | $1,514,289 | $3,215 |
| Seattle-Tacoma-Bellevue, WA | $202,909 | 3.3% | $82,680 | 1.5% | 145.4% | 4.3 ppts | $731,529 | $2,067 |
| Tampa-St. Petersburg-Clearwater, FL | $102,414 | 0.0% | $71,000 | -0.3% | 44.2% | 0.5 ppts | $365,936 | $1,775 |
| Virginia Beach-Norfolk-Newport News, VA-NC | $97,184 | 8.3% | $62,000 | 8.1% | 56.7% | 0.3 ppts | $350,296 | $1,550 |
| Washington-Arlington-Alexandria, DC-VA-MD-WV | $153,261 | 5.0% | $81,520 | 8.1% | 88.0% | -5.7 ppts | $545,950 | $2,038 |
| United States of America | $116,633 | 5.3% | $64,160 | 0.2% | 81.8% | 8.6 ppts | $423,892 | $1,604 |
Methodology
We consider a home affordable if a buyer spends no more than 30% of their income on their housing payment. We use the same threshold for rental affordability. The buy-to-rent premium is defined as the ratio of income needed to afford a typical home to the income needed to afford a typical apartment. In this report, the word “homebuyer” refers to someone who is taking out a loan to finance their purchase.
The income needed to afford the typical home is calculated using the prevailing median home sale price and average mortgage-interest rate over rolling three-month periods, and assumes a 15% down payment. The typical housing payments noted in this report include the mortgage principal, interest, property taxes, homeowners’ insurance and mortgage insurance. The 2025 median household income is estimated using the U.S. Census Bureau’s (ACS) 2023 median household income and 12-month moving average nominal wage growth rates compiled from the Current Population Survey and reported by the Federal Reserve Bank of Atlanta.
The income needed to afford the typical apartment is calculated using the prevailing median asking rent over rolling three-month periods. Median asking rent figures cover newly listed units in apartment buildings with five or more units. Asking rents reflect the current costs of new leases during each time period. In other words, the amount shown as the median asking rent is not the median of what all renters are paying, but the median asking price of apartments that were available for new renters during the report period.
United States
Canada