Hitting a six-figure salary is a major career benchmark in the U.S., but $100,000 doesn’t buy what it used to.
In fact, it won’t pay for a median-priced three-bedroom home in 34 states.
If your household income is $100,000, here’s how to figure out the price range you should stick to when house hunting.
Start with the 30% rule
According to the U.S. Department of Housing and Urban Development, your housing expenses should be no more than 30% of your gross monthly income. So if you earn $100,000, you should limit yourself to $2,500 a month.
Housing costs don’t just refer to your mortgage payments, though. They also include:
- Private mortgage insurance: Also known as PMI, this protects your lender if you default on your mortgage payments. It’s required for most conventional mortgages if you make a down payment of less than 20% and can run between 0.5% and 1.5% of your loan total. In the first quarter of 2025, a median-priced home cost $416,900. If you put 10% down, you could owe as much as $5,600 a year for PMI.
- Homeowners insurance: Lenders typically require homebuyers to take out a policy as part of their mortgage agreement. Premiums for homeowners insurance averaged $3,303 a year in 2024, or just over $275 per month.
- Property taxes: Property taxes vary widely from state to state but from 0.26% to 1.83%, according to the Tax Foundation.
- Utilities: According to Move.org, U.S. households spend an average of about $380 a month on electricity, gas and water. If you add HOA fees, internet service, phone and other necessities, however, the figure can be closer to $600.
Subtracting these other expenses, you could comfortably afford a monthly mortgage payment of about $1,800 to $2,000, depending on your location.
How big is your down payment?
If you’re taking out a mortgage, the house you can reasonably afford depends a lot on how much you’ve saved for a down payment. The more you pay up front, the less you’ll have to repay over the life of your loan.
Someone making $100,000 who puts 20% down on a 30-year fixed-rate mortgage with a 6.5% interest rate could afford a house that costs as much as $396,000.
There are also one-time costs to factor in, though, including closing costs, which run between 3% and 6% of your home’s total price. On a $396,000 property, that could be as much as $23,760.
Most homebuyers don’t put 20% down, so here’s how much you can afford using different down payment amounts.
| Down payment | Maximum home price | Monthly mortgage payment |
|---|---|---|
| 5% | $334,000 | $2,005.55 |
| 10% | $353,000 | $2,008.08 |
| 20% | $396,000 | $2,002.39 |
Housing affordability FAQs
Can I afford a $500,000 house on a $100,000 salary?
If you put 20% down and were conservative on how much you needed for insurance and other costs, you could potentially swing a $400,000 home. But, following the 30% rule, you’d need to earn at least $120,000 to consider a $500,000 property.
How much of a down payment do I need to make?
You can put as little as 5% down with most conventional mortgages. However, until you reach 20% equity, you’ll have to pay private mortgage insurance, which can be more than 1.5% of your loan total annually. There are government-backed mortgages, including VA loans and USDA loans, that don’t require any down payment or PMI. They do have their own fees, however.
How much do I need to make to buy a house?
There is no magic number: The salary needed for a typical three-bedroom home varies from $229,341 in Hawaii to $90,164 in West Virginia. If there are homes in your area that you’re interested in and that wouldn’t require you to spend more than 30% of your monthly gross income on, you’re in a good place to afford a house.
What factors go into my mortgage rate?
Your mortgage rate is determined by a variety of factors, only some of which you have control over, including your credit score, the loan type and amount and the location of the property. However, market conditions, the state of the economy and your lender’s risk tolerance also play a major role.
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At CNBC Select, our mission is to provide our readers with high-quality service journalism and comprehensive consumer advice so they can make informed decisions with their money. Every mortgage review is based on rigorous reporting by our team of expert writers and editors with extensive knowledge of financial products. While CNBC Select earns a commission from affiliate partners on many offers and links, we create all our content without input from our commercial team or any outside third parties, and we pride ourselves on our journalistic standards and ethics.
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