The median household income in the U.S. is just over $80,000. That might make a three-bedroom home unaffordable in some larger markets, but there are still many places where that salary is enough to make you a homeowner.
How much home you can afford on $80,000 a year depends on your location, down payment, property taxes and other factors.
Start with the 30% rule
According to the U.S. Department of Housing and Urban Development, you shouldn't spend more than 30% of your gross monthly income on housing expenses.
If your pay is $80,000 a year, that works out to $2,000 or less per month. Of course, housing costs doesn't just mean your mortgage payment. You also need to factor in:
- Utilities: Americans spend an average of $380 per month on utilities, including electricity, gas, water, trash, sewer, streaming and phone, according to Move.org.
- Property taxes: Property taxes vary widely by state, but average between 0.26% to 1.83% of a home's value, according to the Tax Foundation.
- Private mortgage insurance: If you put less than 20% down, you'll have to buy private mortgage insurance (PMI), which can cost between 0.5% and 1.5% of your loan total annually. On a $300,000 mortgage, that can be as much as $375 per month.
- Homeowners insurance: Most lenders require borrowers to purchase a homeowners insurance policy. In 2024, the average plan cost $275 per month.
So, depending on where they live and other housing costs, someone earning $80,000 a year can comfortably spend between $1,200 to $1,500 a month on their mortgage payment.
How big is your down payment?
The larger your down payment, the smaller your monthly payments will be — and the less you'll pay in interest over the lifetime of your loan.
If you earn $80,000 and put 20% down on a 30-year fixed-rate mortgage with a 6.5% interest rate, you could reasonably afford a house that costs just under $300,000.
Most people don't put 20% down, though. Here's how much house someone who earns $80,000 could afford with different down payment sizes.
| Down payment | Maximum home price | Monthly mortgage payment |
|---|---|---|
| 5% | $249,900 | $1,500 |
| 10% | $263,800 | $1,500 |
| 20% | $296,700 | $1,500 |
You'll also need money for one-time expenses like closing costs, which range from 3% to 6% of the home price. On a $300,000 house, those fees could reach $18,000.
Plug your specific parameters into our mortgage calculator to get a number tailored to your situation.
Housing affordability FAQs
Can I afford a $300,000 house on an $80,000 salary?
If you put 20% down and your other house expenses are minimal, you may be able to afford a $300,000 home. This is the very top of affordability using the 30% rule, however, so consider something slightly more affordable.
How much of a down payment do I need to make?
Most conventional mortgages require at least 5% down, but anything less than 20% means you'll need to pay for private mortgage insurance. With a 580 credit score, You can get an FHA loan with only 3.5% down. There are other government-backed mortgages, like VA loans and USDA loans, that don't require a down payment at all.
How is my mortgage rate calculated?
A variety of factors determine your mortgage rate, including your loan type, including your credit score, the loan type and amount, the property's location and the broader rate environment.
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Correction: An earlier version of this article indicated that, according to HUD, no more than 30% of a person's take-home monthly income should be spent on housing expenses. It is actually 30% of the gross monthly income.
