Income Needed to Afford a $500,000 Home amid Rising Housing Costs

The rising cost of homeownership in the United States is demanding higher income levels from prospective buyers, with the median home price reaching $410,800 in the second quarter of 2025. Affordability calculations highlight that to purchase a $500,000 home, income requirements vary significantly based on down payment size, mortgage interest rates, and additional housing expenses such as insurance and utilities. Using the Department of Housing and Urban Development's guideline that housing costs should not exceed 30% of gross income, buyers with a 10% down payment would need an annual income of approximately $161,680 to maintain affordability. Meanwhile, buyers putting down 20% would require an income near $146,640 to manage monthly payments including estimated utilities and avoid private mortgage insurance costs. Beyond income, factors such as debt obligations, savings, interest rates, and future financial priorities must be considered, as pre-approval for a mortgage does not guarantee long-term financial sustainability. Buyers are advised to perform comprehensive affordability analyses, taking into account potential increases in homeownership costs over time, to make confident and sustainable purchasing decisions.