The monthly costs that come with owning a home are eating an even larger chunk of the typical American's paycheck, a recent housing study suggests.
The combination of mortgage payments, mortgage insurance, property taxes and homeowners insurance accounted for 33.7% of Americans' annual salary in the second quarter of 2025, according to a report that ATTOM, a real estate analytics firm, released June 26. That's up from 32% in the first quarter.
Those percentages are troubling because mortgage lenders and personal finance experts recommend homeowners spend a maximum 28% of their annual income on home-related costs, the report said.
“The squeeze is really on for would-be buyers as we go into the summer, which is usually when the housing market is most active,” ATTOM CEO Rob Barber said in a statement. “Prices just continue to rise and there’s been no relief on mortgage rates. Meanwhile, typical wages are barely increasing from quarter to quarter.”
'Spring and summer are shaping up to be very tough'
Summer 2025 hasn't been exactly smooth sailing for U.S. homebuyers, as interest rates on home loans have flirted with 7% for most of the year. The elevated rates have scared away some, causing the typical frenzied summer-buying season to sputter. The most recent evidence of that trend: New home sales plunged 13.7% year over year in May, according to the U.S. Department of Commerce, while existing home sales were flat during the same period.
“This spring and summer are shaping up to be very tough for the real estate market," Heather Long, chief economist at Navy Federal Credit Union, said in a statement to Homes.com. "Buyers are staying on the sidelines as they worry about uncertainty and high mortgage rates. Buyers are waiting for deals and there just aren’t many of them right now.”
Long and other economists have said mortgage rates will play a crucial role in how much homebuying activity takes place in the back half of 2025.
The typical homeowner paid $2,125 a month for their mortgage in the second quarter — including private insurance, homeowners' insurance, and property taxes, according to the ATTOM study. That's a 5% jump from the first quarter of this year.
Home prices play outsized role in escalating costs
The cost of maintaining a home is rising mostly because median home prices have climbed 55.7% since the first quarter of 2020, the researchers said.
By comparison, the average American's wage has grown by only 26.6%, the report said, citing data from the U.S. Department of Labor.
Home prices have outpaced wage growth the most in these cities with populations over 1 million: Queens County, New York; Broward County, Florida; Philadelphia County, Pennsylvania; Bronx County, New York; and Oakland County, Michigan, according to ATTOM's study.
There are parts of Harris County, Texas; Wayne County, Michigan; Philadelphia County, Pennsylvania; Allegheny County, Pennsylvania; and Cuyahoga County, Ohio, where homeowners are still paying 28% or less of their annual income on housing, the study noted.
Researchers said the second quarter marks the 14th straight in which the cost of maintaining a home has increased. Researchers based their study on a national median home price of $369,000 and an average 30-year fixed mortgage rate of 6.82% — a figure cited from Freddie Mac.