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38 Percent of U.S. Non-Homeowner Households Can Afford Typical Starter Home, 62 Percent Cannot
A LendingTree analysis found non-homeowner households need more than $62,000 in annual income for a $200,000 starter home but earn a median $55,000. The shortfall reaches $67,776 in California while remaining smaller in several Southern states.
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Only 38 percent of U.S. non-homeowner households can afford a typical starter home priced at $200,000, according to a LendingTree analysis reported by CBS News. LendingTree defines entry-level homes as owner-occupied properties at the 25th percentile of the housing market.
Non-homeowner households require just over $62,000 in annual income to purchase such a home, yet their median salary stands at $55,000, creating a gap of more than $7,000 or roughly 13 percent. LendingTree chief consumer finance analyst Matt Schulz said bridging the difference often requires a side hustle or second job. The shortfall varies sharply by state.
In California the median non-homeowner household earns $72,900 while $140,676 is needed to afford the average $482,000 starter home, leaving a $67,776 gap. Rhode Island ranks as the least affordable state, with only 16.5 percent of non-homeowner households able to buy an entry-level home.
Mississippi shows the highest affordability rate at nearly 62 percent, followed by West Virginia at 58 percent and Arkansas and Alabama at 54 percent each.
Schulz noted that homeownership remains a key wealth-building tool for many families. Separately, Zillow reported that 242 cities across the U.S. now have starter homes priced at $1 million or more, a total that has tripled since 2020.
