How much money do I need to make to afford a $500,000 home? (answered)
May 4, 2026
r/NewbHomebuyer
I write educational posts on buying your home for the first time. I even posted my homebuying book at r/NewbHomebuyer if you want to check it out
Opinions on "how much can I afford?" gets tossed around a lot.
A lender will tell you one number, Dave Ramsey will tell you another, and the 30% gross rule lands somewhere in between.
I ran the numbers on a $500,000 home across all 50 states, with 5% down, .25% mortgage insurance factor, no other debt, and today's average 30-year rate at 6.44%.
Here's what each school of thought says you'd need to make.
Part 1: Minimum for a lender
This is the bare minimum income you'd need to squeak through underwriting at a 49.99% back-end DTI with no other debts, which is the ceiling Fannie Mae and Freddie Mac will allow on a conventional loan. Approvable does not mean affordable.
| State | Minimum Income |
|---|---|
| NJ | $101,302 |
| IL | $100,102 |
| TX | $99,801 |
| CT | $98,401 |
| NE | $97,901 |
| NH | $95,501 |
| VT | $95,201 |
| KS | $95,101 |
| NY | $94,300 |
| IA | $93,500 |
| WI | $93,200 |
| RI | $92,300 |
| OH | $92,200 |
| MI | $92,000 |
| SD | $91,800 |
| FL | $91,500 |
| OK | $91,400 |
| PA | $91,100 |
| ME | $89,599 |
| MN | $89,099 |
| MA | $89,099 |
| AK | $87,999 |
| MO | $87,599 |
| MD | $87,499 |
| ND | $87,199 |
| GA | $86,999 |
| MS | $86,499 |
| KY | $86,399 |
| AR | $86,199 |
| IN | $85,899 |
| MT | $85,799 |
| NM | $85,799 |
| OR | $85,499 |
| NC | $85,399 |
| LA | $85,299 |
| WA | $85,099 |
| VA | $84,798 |
| CA | $84,498 |
| CO | $84,298 |
| TN | $84,098 |
| AZ | $83,798 |
| ID | $83,098 |
| SC | $83,098 |
| WY | $82,798 |
| WV | $82,398 |
| DE | $82,298 |
| NV | $82,198 |
| UT | $81,998 |
| AL | $81,798 |
| HI | $79,497 |
Part 2: The minimum income needed for the Ramsey 25% net take-home rule
This one factors in property taxes, homeowners insurance, state income tax, federal tax, FICA, and a 6% 401k contribution to get to a true net number. It's why a state like TX (no state income tax) shakes out differently than UT (4.65%), even when the housing costs are similar.
| State | Minimum Income |
|---|---|
| NJ | $360,805 |
| CT | $325,250 |
| VT | $323,233 |
| NE | $321,308 |
| IL | $320,006 |
| WI | $308,993 |
| NY | $308,756 |
| KS | $305,502 |
| MN | $305,335 |
| IA | $300,567 |
| RI | $296,527 |
| TX | $293,640 |
| ME | $292,363 |
| OR | $291,064 |
| OK | $286,844 |
| MI | $286,574 |
| CA | $283,712 |
| OH | $283,635 |
| MA | $279,724 |
| NH | $279,161 |
| PA | $277,893 |
| MD | $277,538 |
| GA | $274,106 |
| MO | $273,545 |
| HI | $273,042 |
| NM | $272,168 |
| MT | $272,168 |
| MS | $270,581 |
| AR | $269,081 |
| VA | $267,923 |
| SD | $267,142 |
| FL | $266,162 |
| KY | $265,789 |
| SC | $264,750 |
| NC | $263,446 |
| LA | $263,099 |
| DE | $262,759 |
| ND | $262,207 |
| ID | $262,089 |
| CO | $260,263 |
| IN | $260,088 |
| WV | $256,671 |
| AK | $254,798 |
| AL | $254,052 |
| UT | $253,290 |
| AZ | $250,725 |
| WA | $245,378 |
| TN | $242,130 |
| WY | $237,907 |
| NV | $235,958 |
Part 3: The 30%-of-your-gross rule
A popular middle-ground rule of thumb. It doesn't account for taxes or savings. just a flat 30% of your gross income going toward the housing payment.
| State | Minimum Income |
|---|---|
| NJ | $168,803 |
| IL | $166,803 |
| TX | $166,303 |
| CT | $163,969 |
| NE | $163,136 |
| NH | $159,136 |
| VT | $158,636 |
| KS | $158,469 |
| NY | $157,136 |
| IA | $155,803 |
| WI | $155,303 |
| RI | $153,803 |
| OH | $153,636 |
| MI | $153,303 |
| SD | $152,969 |
| FL | $152,469 |
| OK | $152,303 |
| PA | $151,803 |
| ME | $149,303 |
| MA | $148,469 |
| MN | $148,469 |
| AK | $146,636 |
| MO | $145,969 |
| MD | $145,803 |
| ND | $145,303 |
| GA | $144,969 |
| MS | $144,136 |
| KY | $143,969 |
| AR | $143,636 |
| IN | $143,136 |
| NM | $142,969 |
| MT | $142,969 |
| OR | $142,469 |
| NC | $142,303 |
| LA | $142,136 |
| WA | $141,803 |
| VA | $141,303 |
| CA | $140,803 |
| CO | $140,469 |
| TN | $140,136 |
| AZ | $139,636 |
| ID | $138,469 |
| SC | $138,469 |
| WY | $137,969 |
| WV | $137,303 |
| DE | $137,136 |
| NV | $136,969 |
| UT | $136,636 |
| AL | $136,303 |
| HI | $132,469 |
Part 4: Combined so you can see it all side by side
| State | Lender | 30% Gross | 25% Net |
|---|---|---|---|
| NJ | $101,302 | $168,803 | $360,805 |
| IL | $100,102 | $166,803 | $320,006 |
| TX | $99,801 | $166,303 | $293,640 |
| CT | $98,401 | $163,969 | $325,250 |
| NE | $97,901 | $163,136 | $321,308 |
| NH | $95,501 | $159,136 | $279,161 |
| VT | $95,201 | $158,636 | $323,233 |
| KS | $95,101 | $158,469 | $305,502 |
| NY | $94,300 | $157,136 | $308,756 |
| IA | $93,500 | $155,803 | $300,567 |
| WI | $93,200 | $155,303 | $308,993 |
| RI | $92,300 | $153,803 | $296,527 |
| OH | $92,200 | $153,636 | $283,635 |
| MI | $92,000 | $153,303 | $286,574 |
| SD | $91,800 | $152,969 | $267,142 |
| FL | $91,500 | $152,469 | $266,162 |
| OK | $91,400 | $152,303 | $286,844 |
| PA | $91,100 | $151,803 | $277,893 |
| ME | $89,599 | $149,303 | $292,363 |
| MN | $89,099 | $148,469 | $305,335 |
| MA | $89,099 | $148,469 | $279,724 |
| AK | $87,999 | $146,636 | $254,798 |
| MO | $87,599 | $145,969 | $273,545 |
| MD | $87,499 | $145,803 | $277,538 |
| ND | $87,199 | $145,303 | $262,207 |
| GA | $86,999 | $144,969 | $274,106 |
| MS | $86,499 | $144,136 | $270,581 |
| KY | $86,399 | $143,969 | $265,789 |
| AR | $86,199 | $143,636 | $269,081 |
| IN | $85,899 | $143,136 | $260,088 |
| MT | $85,799 | $142,969 | $272,168 |
| NM | $85,799 | $142,969 | $272,168 |
| OR | $85,499 | $142,469 | $291,064 |
| NC | $85,399 | $142,303 | $263,446 |
| LA | $85,299 | $142,136 | $263,099 |
| WA | $85,099 | $141,803 | $245,378 |
| VA | $84,798 | $141,303 | $267,923 |
| CA | $84,498 | $140,803 | $283,712 |
| CO | $84,298 | $140,469 | $260,263 |
| TN | $84,098 | $140,136 | $242,130 |
| AZ | $83,798 | $139,636 | $250,725 |
| ID | $83,098 | $138,469 | $262,089 |
| SC | $83,098 | $138,469 | $264,750 |
| WY | $82,798 | $137,969 | $237,907 |
| WV | $82,398 | $137,303 | $256,671 |
| DE | $82,298 | $137,136 | $262,759 |
| NV | $82,198 | $136,969 | $235,958 |
| UT | $81,998 | $136,636 | $253,290 |
| AL | $81,798 | $136,303 | $254,052 |
| HI | $79,497 | $132,469 | $273,042 |
one other thought that people will be sure to mention: median home prices in each state are different too. A $500k home in TX is very different from a $500k home in Hawaii. Should be a given, but people will mention it anyway.
Hope it helps!
Sam
I write educational posts on buying your home for the first time. I even posted my homebuying book at r/NewbHomebuyer if you want to check it out
Originally shared by u/SamTMortgageBroker in r/NewbHomebuyer — view the original thread.