The typical salary required nationwide for homeownership is now $106,500 — a 61% increase from the $59,000 required just four years ago

The typical salary required nationwide for homeownership is now $106,500 — a 61% increase from the $59,000 required just four years ago.

Achieving homeownership now requires an increasingly high salary. Americans must earn around $106,500 to comfortably afford a typical home, a significant jump from the $59,000 annual household income needed in 2020, according to new research from Zillow.

Homeownership is generally considered affordable if housing costs, including mortgage payments, consume no more than 30% of pre-tax income. At the time of the study, the mortgage rate was about 6.6%.

In 2020, the U.S. median income was roughly $66,000, making homeownership feasible for more than half of American households. Today, the situation is quite different.

The required income to comfortably afford a home has risen 80% to approximately $106,500, surpassing the median household income, which has only increased by 23% to $81,000 over the same period, according to the American Community Survey from the Bureau of Labor Statistics.

What's driving up housing costs? Wages have not kept pace with the rise in home prices and mortgage rates.

Data from real estate investing platform Arrived shows that even higher-income earners (those in the top 30%) struggle to afford homes in major U.S. metro areas, regardless of age. In contrast, in 2001, the top 30% of income earners could afford homes in these cities as early as age 24.

Buying a home is one of the biggest purchases an individual or household will make and can build wealth over time as the home's value appreciates.

"Housing costs have soared over the past four years as drastic hikes in home prices, mortgage rates, and rent growth have far outpaced wage gains," said Orphe Divounguy, a senior economist at Zillow, in a note on the report. He added that high housing costs are pushing Americans to seek property in more affordable parts of the country. Currently, the typical home in the U.S. is worth about $344,000.

Divounguy believes the solution to making homeownership more accessible is simple: Create more supply. "Mortgage rates easing down has helped some, but the key to improving affordability long term is to build more homes," he said.

Affordable cities where one can buy a home without breaking the bank include Pittsburgh, where an income of roughly $58,200 is sufficient. Other relatively affordable cities are Birmingham, Alabama; Cleveland; Memphis, Tennessee; and New Orleans.

In contrast, to afford a typical home in the most expensive metro areas, one must earn at least $200,000 annually. The most expensive market in the U.S. is San Jose, California, where home affordability requires a minimum income of about $454,300.