Housing market squeeze: The income needed to purchase a typical U.S. home is up 79% since 2020

"While the income needed to buy the median-priced U.S. home is +78.8% higher than it was in January 2020, it's down -5.9% year over year. Methodology: This Zillow calculation is conservative and assumes a 20% down payment and that the homebuyer spends less than 30% of their monthly income on the total monthly payment."

"Regional housing markets that have experienced outright home price corrections since the end of the pandemic housing boom have seen faster affordability improvements. That said, many of those places-like the Austin, Texas, metro area-also experienced greater home price overheating during the pandemic housing boom."

"During the pandemic housing boom, housing demand surged rapidly amid ultralow interest rates, stimulus, and the remote work boom. Federal Reserve researchers estimate that 'new construction would have had to increase by roughly 300% to absorb the pandemic-era surge in demand.'"

The income required to purchase a median-priced U.S. home has increased dramatically from $52,041 in January 2020 to $93,061 in January 2026, representing a 78.8% increase. However, this figure declined 5.9% from the previous year's peak of $98,900 in January 2025. Zillow's calculation assumes a conservative 20% down payment with monthly housing costs not exceeding 30% of household income. Regional markets experiencing home price corrections since the pandemic housing boom ended have shown faster affordability improvements, though many of these areas, including Austin, Texas, experienced significant price overheating during the pandemic. The surge in housing demand during the pandemic resulted from ultralow interest rates, government stimulus, and remote work adoption, with Federal Reserve researchers estimating new construction would have needed to increase by approximately 300% to meet pandemic-era demand.

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