To afford a million-dollar home, you generally need a solid income (around $225k-$270k+ annually), a substantial down payment (20% or $200k+), excellent credit, and low existing debt to secure a jumbo loan, while also saving for taxes, insurance, and upkeep, often requiring income multiples of 3-4x your salary and 6-12 months of reserves for emergencies.
Housing prices and mortgage rates remain high, putting homeownership out of reach for many Gen Zers. Affording a down payment is one of the biggest hurdles to homeownership for this generation, since many must first pay rising rent prices and their student loan debt.
Now, 8.5% of U.S. homes have an estimated value of $1 million or more, a record high, according to a new analysis by brokerage Redfin provided exclusively to The Wall Street Journal.
You can typically afford an $800,000 mortgage with an annual income between $200,000 and $260,000. The amount you can borrow depends on more than just your salary, though. We'll cover those factors below. Luckily, you don't have to rely on guesswork to understand your potential monthly payments.
That's up from around 8% in 2022. San Jose, California, tops the list of U.S. metros with the highest share of million-dollar homes with 72% of owner-occupied homes worth over $1 million, according to LendingTree.
A millionaire is somebody with a net worth of at least $1 million. It's a simple math formula based on your net worth. When what you own (your assets) minus what you owe (your liabilities) equals more than a million dollars, you're a millionaire. That's it!
The "3-3-3 Rule" in real estate has a few meanings, most commonly a financial guideline for buyers (housing cost under 30%, 30% down/closing, home price under 3x income) or an agent marketing strategy (3 calls, 3 notes, 3 resources monthly), but it can also refer to evaluating property by looking at the last/future 3 years and 3 nearby comparable properties for smart investing.
To afford a $750k house, you generally need an annual income of around $170,000 to $230,000, but this varies significantly with interest rates, down payment, property taxes, insurance, and other debts, with lenders often using the 28/36 rule (housing costs under 28% of gross income, total debt under 36%) as a guideline. A higher interest rate or more debt requires a higher income, while a larger down payment or lower property taxes can reduce the needed income.
Yes, roughly 90% or more of households in China own their homes, making it one of the highest homeownership rates globally, driven by cultural emphasis on property as stability, significant housing reforms since the late 1990s, and high household savings, though this also leads to high prices and affordability issues for younger generations. While most own property, they hold long-term land-use rights (often 70 years), as the land itself remains state-owned.
Mortgages make up about 70% of household balances. Conventional wisdom has long recommended that homeowners pay off their mortgage before retiring. Yet over the past three decades, more older adults are carrying their mortgage into retirement, while the amount owed has increased dramatically.
Baby Boomers are the generation most likely to downsize as they retire, seeking easier maintenance, reduced costs, and a lifestyle focused on travel/hobbies, often moving from large family homes to smaller condos or single-level houses, while Generation X (often still raising families or working from home) is more likely to be upsizing or needing more space, though some Gen Xers are starting to consider downsizing as they approach retirement.
Where Baby Boomers Own the Most Homes. While baby boomers—defined as Americans between the ages of 60 and 78 in 2024—comprise just over 20% of the U.S. population, they account for more than 37% of homeowners nationwide.
To afford a $700,000 house, you generally need an annual income between $180,000 to $235,000, depending on interest rates, down payment, and existing debts, with lenders often using the 28/36 rule (housing costs under 28% of gross income, total debt under 36%) to assess affordability. A 20% down payment ($140,000) is common, reducing your loan, but taxes, insurance, and other expenses add to the total monthly cost.
However, most lenders still require your score to be at least 600 for an insured mortgage, even with a co-signer. How long does it take to raise my score enough to buy a home? Raising your credit score enough to buy a home (typically up to at least 600–680) can take anywhere from about 3 to 12 months.
It could wreck your credit
If your mortgage is too big, keeping up with those payments could mean falling behind on other bills. And if that happens, your credit score could take a serious beating. You'll generally see your score fall substantially with just a single late or missed bill payment.