Six-figure salaries now required to afford a typical home as millennials continue renting in 47 out of 50 major U.S. metro regions

The U.S. housing market is grappling with a severe affordability crisis, as younger people find it harder than ever to buy homes while Baby Boomers continue to dominate the market. According to the National Association of Realtors (NAR), only 21% of home purchases in 2025 were made by first-time buyers—a historic low—while the typical age for first-time buyers has climbed to a record 40. NAR Deputy Chief Economist Jessica Lautz describes the market as "desperately lacking affordable options," with high mortgage rates and escalating home prices forming major obstacles for millennials and Gen Z.

The gap in affordability has grown so wide that in 47 of the 50 largest U.S. metro areas, a six-figure salary is now necessary to buy a median-priced home. In places like Los Angeles and San Jose, buyers need to earn more than $270,000 and $323,000, respectively—figures that far exceed the local average incomes. Redfin reports that the national income needed to afford a typical home is $112,000, which is over 30% higher than the median U.S. household income. This disparity is forcing more young adults to rent, even as rental prices have also climbed due to inflation.

The relationship between renting and owning has changed significantly. Between 2020 and 2025, home prices in the U.S. jumped 53%, even though mortgage rates stayed between 6% and 7%, shutting out many potential buyers. Renting is still generally less expensive than owning—Newmark data shows renters pay about $1,200 less per month—but the wealth-building advantages of homeownership, like building equity, are slipping away from younger generations. Jim Reid of Deutsche Bank pointed out that in 2024, people aged 60 and above accounted for 46% of home purchases, highlighting the growing generational divide.

The issue has become politicized, with President Donald Trump casting affordability as a partisan concern. In a post on Truth Social, he urged, "If affordability is your issue, VOTE REPUBLICAN!" and connected lower energy prices to overall economic relief. His argument is that cheaper fuel helps families manage their budgets, which could improve affordability—a claim supported by recent drops in national gas prices below $3 per gallon. Still, critics maintain that solving the housing crisis will require more targeted policies than just lowering energy costs.

The outlook remains unclear. Some experts, like Jim Reid, believe that younger generations may eventually inherit homes from older owners, but when and how this will happen is uncertain. With wages failing to keep up with rising prices and mortgage rates staying high, homeownership is becoming an increasingly distant goal for many Americans.