U.S. starter home affordability crisis tightens for most buyers

A recent LendingTree analysis finds that only about 37.6% of non‑homeowner households in the United States can afford a typical starter home, defined as the weighted 25th‑percentile of owner‑occupied homes. The median non‑homeowner income of $55,000 falls roughly $7,100 short of the $62,099 needed to qualify for an entry‑level property, whose average price is about $200,000.

Matt Schulz, LendingTree’s chief consumer finance analyst, cautioned that "it's safe to say that most people don’t get raises of $7,099 each year," meaning many would need side‑hustles or other sacrifices to bridge the gap. State‑by‑state data shows Rhode Island as the least affordable market, where only 16.5% of households can afford a starter home priced around $350,000. California exhibits the largest income shortfall, with a typical starter home costing $482,000 and requiring an annual income of $140,676—only 21.3% of households meet that level. By contrast, Mississippi leads in accessibility, with 61.8% of non‑homeowners able to afford a starter home.

Among generations, millennials are the most likely to qualify, with 45.2% able to afford a starter home, compared with 37.3% of Gen Z and 24.3% of baby boomers. The findings suggest that income, rather than mortgage rates, is the primary barrier for first‑time buyers, prompting calls for broader financing options and affordability programs.