economy
Less Than 40% of U.S. Households Can Afford a Starter Home, Study Finds
Updated on: June 30, 2026 / 1:39 PM EDT / CBS News
TL;DR
- Only 38% of non-homeowner households can afford a starter home, defined as a property valued at the 25th percentile of the market.
- The median salary for non-homeowners ($55,000) is over $7,000 less than the income needed to afford a starter home ($62,000+).
- In 2026, 242 U.S. cities have starter homes costing $1 million or more, tripling since 2020.
- California has a significant income gap, with starter homes costing $140,676 more than the median non-homeowner household earns.
- Rhode Island is the least affordable state, with only 16.5% of households able to afford an entry-level home.
- Mississippi, West Virginia, Arkansas, and Alabama are among the most affordable states for starter homes.