With home prices at record levels and mortgage rates hovering at 7%, monthly housing payments are increasingly unaffordable.

To comfortably afford an average U.S. home, a middle-class worker needs to put down $127,750 — or 35.4% — according to a new analysis from the real estate website Zillow.

What You Need To Know

  • A middle-class worker needs to put down $127,750 to comfortably afford an average U.S. home, according to Zillow

  • The median annual wage in the U.S. is $48,060, while the typical U.S. home costs $360,000

  • About 43% of first-time homebuyers in 2023 got down payment money from frirends or family

  • Pittsburgh is the most affordable market for median-income households

Prior to the pandemic, when homes cost 50% less than they do now and mortgage rates were about 4%, the same buyer would have been able to afford a home with no money down. Zillow based its analysis on what many economists advise — to spend no more than 30% of a household’s monthly income on a mortgage.

“Down payments have always been important, but even more so today,” Zillow Chief Economist Skylar Olsen said in a statement. “With so few available, buyers may have to wait even longer for the right home to hit the market, especially now that buyers can afford less. Mortgage rate movements during that time could make the difference between affording that home and not.”

It would take a household making the median income roughly 12 years of saving 10% of their income to bank $127,750. The median annual wage in the U.S. in 2023 was $48,060, according to the Bureau of Labor Statistics. For its analysis, Zillow valued the typical U.S. home at $360,000.

To be able to come up with such a large down payment, 43% of first-time homebuyers last year got money from friends or family — up from about 30% before the pandemic in 2018.

Zillow said the typical home is affordable with less than 20% down for median-income households in ten major metropolitan areas, including Pittsburgh, which is the most affordable housing market.

San Jose, Calif., is the least affordable for a median-income household, where more than $1.3 million would be needed for a down payment to afford the monthly mortgage. In LA, a median-income household would need to put down $780,203 to afford the monthly payment.