Less than 40% of U.S. households can afford a starter home, study finds

A new LendingTree analysis finds that fewer than 40% of U.S. households can afford a typical starter home, underscoring how entry-level prices and incomes leave many families priced out. The study says only 38% of non-homeowner households can afford a home defined as owner-occupied at the 25th percentile of the market, with a typical starter home costing about $200,000. Non-homeowners need to earn just over $62,000, while the median salary is $55,000, creating a gap of more than $7,000 (about 13%). The mismatch is larger in some states, including California, where the median non-homeowner household earns $72,900—well below the estimated $140,676 needed for a typical $482,000 starter home. Rhode Island is cited as the least affordable state (16.5%), while Mississippi leads with nearly 62%.