Ask any would-be homebuyer their top complaint about today’s housing market, and you’ll likely hear the same answer: houses are too expensive. Turns out, they aren’t just whining — it’s true. A new study by Clever Real Estate found that only two U.S. cities have incomes high enough to support a home purchase.
Of America’s 50 highest-population metros, Detroit and Pittsburgh offer median salaries that enable workers to afford a median-priced home. When you look at the states, only Iowa is affordable.
Today’s homebuyers face numerous challenges as they seek an affordable house. One is high home prices, which rose sharply after the pandemic before trending back down. As of mid-June, the national median sales price of houses sold in the U.S. is $416,900. Another issue is that the median income hasn’t kept pace. Since 2000, home prices have increased by 141.1%, while the median income has risen by just 15% to $80,610.
“When the average person cannot afford the average home, the middle class starts thinning out,” said Eric Croak, president of Croak Capital, a fiduciary financial firm in Ohio. “That makes entry-level buyers disappear.”
Homeowners’ insurance and property taxes also significantly impact affordability, adding hundreds of dollars to a monthly mortgage payment. It’s a true balancing act to find the right combination of income, sales price, and expenses for an affordable home.
Even More Reasons for Pessimism Among Findings
It’s worth noting that the study’s assumptions may be somewhat optimistic. Clever used a 20% down payment in its calculations, although first-time homebuyers typically put down an average of 9%.
Also, the affordability findings are based on the well-known standard of spending no more than 28% of one’s gross monthly income on housing costs. However, a survey by CardRates found that 53% of Gen Zers and millennials spend more than half of their monthly salary on their homes.
By the Clever study’s parameters, the typical American household earns just 70% of the income needed to afford a median-priced home. Detroit and Pittsburgh are the most affordable U.S. cities for workers, while Iowa is the most affordable state.
There are other home-buying expenses to consider as well, such as the real estate agent’s commission fee and closing costs. Potential owners should also ensure they can afford the upkeep and maintenance, which can be 1–4% of a home’s value each year.
What Makes These Places Affordable?
Detroit’s median home sales price is $195,000, and the median household income is $72,574 — more than $12,000 above the threshold needed for a 20% down payment. Pittsburgh has a median home sales price of $250,000 and a median household income of $72,532, about $1,300 more than the income needed to put down 20%.
Experts say Detroit and Pittsburgh are outliers compared to other major metro areas. For instance, neither city has seen a large influx of rental investors or other cash-buyer companies that flip properties.
Brian Rudderow, a real estate investor at HBR Colorado, points to Detroit’s high vacancy rate, lower cost of living, and lower demand compared to other large cities. As of 2023, Detroit’s vacancy rate was 21.9%, with more than 68,000 empty housing units. The city’s population had been steadily declining for about 20 years, but has started growing again.
Similarly, Pittsburgh’s population declined for decades, following the departure of key industries such as steel manufacturing and coal from the area. However, the city has been making slight year-over-year increases since 2023.
“Detroit and Pittsburgh never saw the same explosive price growth as places like San Francisco, Austin, or LA,” said Sebastian Hovsepian, a realtor at NEXT Brokerage. “Their housing markets are more grounded in local demand, not investors or out-of-town buyers. That keeps things relatively balanced.
“The salaries aren’t necessarily super high, but the cost of entry into the market is low enough that people with average incomes can still buy, and that’s rare.”
In Iowa, the median household income is $71,433, and the median home price is $239,000, making it relatively easy for workers to afford a home with a 20% down payment. Annual tax and insurance costs are also low, averaging $2,940 annually. The state boasts below-average construction costs of $100–$160 per square foot, as well as more available land.
“Iowa wins by being boring in the best way,” Croak said. “When the input costs are low, the mortgage stays manageable, even at 7%. It works because it is consistent, not because it is flashy.”
The Impacts of an Unaffordable Housing Market
In 48 of the 50 largest metropolitan areas, a median income can’t purchase the median-priced home. This impacts more than just real estate, bleeding into school quality, neighborhood safety, and upward mobility. In short, it changes the fabric of communities.
“People start chasing cheaper rent instead of better opportunity,” Croak said. “That builds cycles of transience, which hurts community investment and voter turnout. Over time, it guts the middle and hollows the tax base.”
When a city’s residents can’t afford to purchase a home, it reshapes their attitudes toward housing. Renting becomes the norm rather than a stepping stone to eventual homeownership, said Peter Evering, a sales and operations manager at Utopia Management. As a result, the emotional attachment to owning a home tends to diminish.
Most people don’t move to a large metro area for the real estate — they move for the job opportunities. Workers understand that an expanding job market leads to increased home prices, so renting becomes the expectation. It’s a more practical choice precisely because houses are so unaffordable.
“This somewhat explains why renting is so normalized in expensive cities and why homeownership feels less aspirational there than it does in more affordable cities like Detroit or Pittsburgh,” Evering said.
The inability to afford a home deepens the country’s wealth gap, too. Homeownership is one of the primary ways to build equity and generational wealth. A 2024 report from the Aspen Institute Financial Security Program found that homeowners have a median net worth of $400,000 compared to just $10,400 for renters.
“If people can’t afford to buy, they’ll miss out entirely,” said Hovsepian.
Unaffordability Points to Bigger Issues
Catherine Mack, a real estate investor and owner of House Buyer Network, calls Detroit and Pittsburgh “accidents of history.” In most major cities, home values have surged far beyond the average household income. After decades of declining populations, these two cities have been left with a housing stock that outpaces demand. Those moving back into these areas can now take advantage of the difference.
“If you look at another time in history, you’d probably see a Detroit or Pittsburgh that’s less homeowner-friendly compared to what it is now,” Mack said.
However, experts say that having only two major U.S. cities that are affordable to potential homeowners is worrisome and points to more significant issues in the country’s housing system. Investors, limited housing supply, and zoning restrictions have driven prices to the point where, in some cases, even those with good jobs can’t afford a home where they live.
The rise of remote work during and after the pandemic gave buyers more options as people left large cities for mid-sized markets, such as Tampa, Florida, and Asheville, North Carolina. Five years later, prices in this second tier of the housing market are starting to come down, but they’re still approximately 50–60% higher than they were.
“Our housing system isn’t working for the average person,” Hovsepian said. “And as a realtor, I see it firsthand. Buyers are maxed out, frustrated, or giving up.”
