Why 92% of Median Earners in U.S. Cities Can't Afford a Mortgage
The number behind that headline rests on one assumption: a household should spend no more than 30% of its gross income on housing. Zoocasa analyzed median incomes and mortgage payments across 225 U.S. cities and found that only about 8% of them (18 cities) would require households to put less than 28% of monthly income toward a mortgage. Put the other way, a typical earner in roughly nine of ten big American cities cannot buy a typical home there without stretching past the line most advisors treat as safe.
I work in Edmonton, so I don't read this as a story about Phoenix or Boston. I read it as a warning about how affordability gets measured, and what happens when one ratio becomes the whole conversation.
Why the gap got so wide
The American math is not complicated. U.S. median home prices sat somewhere in the low $400,000s through 2024 and 2025. That is well above where they were before 2020. Median household income was closer to the mid-to-high $80,000s. Thirty-year fixed rates spent long stretches between 6% and 7.5%, more than double the lows of 2021. When prices climb faster than paycheques and borrowing costs double at the same time, the monthly payment outruns the median earner. That is the whole story.
Then the payment grows. Property taxes, insurance and mortgage insurance get added on top of principal and interest. A buyer who passes on the mortgage alone can fail once the full bill is counted.
Where the 30% rule helps and where it misleads
The 30% rule is useful because it is simple. It keeps people from buying a home that leaves nothing for groceries, child care or a car that breaks down. I would not throw it out.
But it is a guideline, not a verdict. A household with no car loan and no student debt can carry more than one with both. A self-employed owner whose tax return shows a lower income, after write-offs, than the money that actually reaches their account looks worse on paper than in real life. A median-to-median comparison also hides the buyer who is willing to buy a smaller place or live in a cheaper neighbourhood. The 8% figure is a fair picture of the typical case. It is a poor guide for any one family.
It also says nothing about the cost of owning beyond the payment. Roofs, furnaces and water heaters do not care what your debt ratio was on approval day.
What this means in Edmonton
Canada adds a test the U.S. does not have. Under OSFI rules, you have to qualify at your contract rate plus 200 basis points (two percentage points), or 5.25%, whichever is higher. Here is an illustrative example. If your lender offers 4%, you are approved as if you were paying 6%. That buffer cuts how much you can borrow, but it also means a buyer who qualifies has already shown they can absorb a real rate increase. I think that trade is worth it, even though it shuts some people out.
The down payment works differently here too. With an insured mortgage, CMHC rules require 5% on the first $500,000 and 10% on the portion above that, up to a $1.5 million purchase price. On a $600,000 home, again as an illustration, that comes to $35,000. For many first-time buyers, saving that amount is a harder barrier than the monthly payment.
Self-employed buyers face their own hurdle. CMHC looks for 24 consecutive months of financial statements. If you run a business, getting your paperwork in order is often what gets you approved.
My view is this. The U.S. numbers show what happens when prices and rates both climb faster than income. Alberta buyers should not take comfort in being somewhere else. They should take the method seriously. Count the full monthly cost, not only the mortgage. Qualify at the stress-tested rate and make sure you could actually live with that payment. Treat waiting for lower rates as a gamble, because lower rates tend to bring more buyers and higher prices. The 30% line will not tell you whether you can afford a home. Your full budget, run honestly, will.
The number behind that headline rests on one assumption: a household should spend no more than 30% of its gross income on housing. Zoocasa analyzed median incomes and mortgage payments across 225 U.S. cities and found that only about 8% of them (18 cities) would require households to put less than 28% of monthly income toward a mortgage. Put the other way, a typical earner in roughly nine of ten big American cities cannot buy a typical home there without stretching past the line most advisors treat as safe.
I work in Edmonton, so I don't read this as a story about Phoenix or Boston. I read it as a warning about how affordability gets measured, and what happens when one ratio becomes the whole conversation.
Why the gap got so wide
The American math is not complicated. U.S. median home prices sat somewhere in the low $400,000s through 2024 and 2025. That is well above where they were before 2020. Median household income was closer to the mid-to-high $80,000s. Thirty-year fixed rates spent long stretches between 6% and 7.5%, more than double the lows of 2021. When prices climb faster than paycheques and borrowing costs double at the same time, the monthly payment outruns the median earner. That is the whole story.
Then the payment grows. Property taxes, insurance and mortgage insurance get added on top of principal and interest. A buyer who passes on the mortgage alone can fail once the full bill is counted.
Where the 30% rule helps and where it misleads
The 30% rule is useful because it is simple. It keeps people from buying a home that leaves nothing for groceries, child care or a car that breaks down. I would not throw it out.
But it is a guideline, not a verdict. A household with no car loan and no student debt can carry more than one with both. A self-employed owner whose tax return shows a lower income, after write-offs, than the money that actually reaches their account looks worse on paper than in real life. A median-to-median comparison also hides the buyer who is willing to buy a smaller place or live in a cheaper neighbourhood. The 8% figure is a fair picture of the typical case. It is a poor guide for any one family.
It also says nothing about the cost of owning beyond the payment. Roofs, furnaces and water heaters do not care what your debt ratio was on approval day.
What this means in Edmonton
Canada adds a test the U.S. does not have. Under OSFI rules, you have to qualify at your contract rate plus 200 basis points (two percentage points), or 5.25%, whichever is higher. Here is an illustrative example. If your lender offers 4%, you are approved as if you were paying 6%. That buffer cuts how much you can borrow, but it also means a buyer who qualifies has already shown they can absorb a real rate increase. I think that trade is worth it, even though it shuts some people out.
The down payment works differently here too. With an insured mortgage, CMHC rules require 5% on the first $500,000 and 10% on the portion above that, up to a $1.5 million purchase price. On a $600,000 home, again as an illustration, that comes to $35,000. For many first-time buyers, saving that amount is a harder barrier than the monthly payment.
Self-employed buyers face their own hurdle. CMHC looks for 24 consecutive months of financial statements. If you run a business, getting your paperwork in order is often what gets you approved.
My view is this. The U.S. numbers show what happens when prices and rates both climb faster than income. Alberta buyers should not take comfort in being somewhere else. They should take the method seriously. Count the full monthly cost, not only the mortgage. Qualify at the stress-tested rate and make sure you could actually live with that payment. Treat waiting for lower rates as a gamble, because lower rates tend to bring more buyers and higher prices. The 30% line will not tell you whether you can afford a home. Your full budget, run honestly, will.
Sources
Read Next
Five Money Checks Canadian Snowbirds Should Finish Before Heading South
Canadian Bank Security Assumes a Human Is Logging In. AI Agents Break That
Before Storm Winds Arrive, Turn 5 Yard Hazards Into Protective Buffers
A 25 Basis Point Hike Doesn't Erase Variable's Long-Run Edge Over Fixed