Big Jump: Household Income Needed to Buy a Typical Missouri Home Rises Nearly 50% Since 2020

Buying a home in Missouri used to be a milestone that many considered within reach, but a new Bankrate study shows the goal is getting harder to hit. As of 2025, you’ll need an average household income of $74,263 to buy a typical Missouri home—up nearly 50% from just five years ago. In this article, we break down the numbers, share what’s happening behind the scenes, and give you simple strategies for stretching your budget as you house hunt.

Why Home Affordability is Changing in Missouri

Let’s start with the hard facts: The income needed to buy an average home in Missouri has shot up from about $50,000 in 2020 to just over $74,000 in 2025—a jump of almost 50%. That’s a huge leap in only five years. What’s driving such a big change? It boils down to two things: rapidly rising home prices and higher mortgage interest rates.

For example, in St. Louis, the median sale price for a home is now $260,000. To comfortably afford this, most buyers need a yearly income of about $70,912. Move over to Kansas City, and the median home sells for $341,600, which requires an annual income of around $88,865. These prices are not just big-city problems—similar trends are affecting towns across the state.

“The average American household now needs a six-figure income to afford a ‘typical home’ in many markets. While Missouri is just below that, the gap is closing fast.”

This affordability crunch comes down to simple math. If home prices rise but wages only grow a little, it takes up more of your paycheck to cover the mortgage. Add in higher interest rates—meaning you pay more over the life of the loan—and the dream of homeownership feels further away for many families.

The good news: Missouri still remains one of the more affordable states compared to the coasts. If you’re thinking about buying soon, getting pre-approved for a mortgage and checking your credit score can help you act quickly if you find the right place. Start watching local listings to understand price trends in your specific area—small differences in neighborhoods can have a big effect on affordability.

Sizing Up the True Cost of Buying a Home in 2025

It’s not just the sticker price of a home that matters. Let’s break down what goes into figuring out how much you really need to earn to afford a house:

• Down payment (usually 3%–20% of the home price)
• Monthly mortgage payments
• Property taxes and homeowners insurance
• Upkeep and repairs

Recent data says first-time homebuyers usually put down about 9% as a down payment, while repeat buyers tend to put down 23%. For a $260,000 home in St. Louis, a 9% down payment would be about $23,400. After that, monthly mortgage payments—especially at today’s interest rates—become the main expense to budget for.

“Owning a home can feel like climbing a mountain, but reaching the top starts with understanding what each step costs.”

Higher mortgage rates make a big impact, too. Just a 1% increase in your loan’s interest rate could add hundreds of dollars to your monthly payment. That’s why it’s important to shop around for lenders, compare rates, and know your credit standing.

If you’re worried all these numbers sound scary, take heart: Making a detailed monthly budget is one of the best ways to prepare for buying a home. Try plugging your target home price and down payment into a free online “home affordability calculator.” Play around with numbers to see how changing the down payment or loan term (like 15-year vs 30-year mortgage) affects what you’ll pay each month.

Remember, you don’t have to put down 20% to buy a house, especially for first homes, but a bigger down payment usually means lower monthly payments and possibly avoiding private mortgage insurance (PMI). Carefully consider all the costs—ask about closing fees, moving expenses, and future repairs—to avoid being caught off guard.

Next steps: Write a list of “must haves” and “nice to haves” for your future home and prioritize your needs. The more flexible you are, the more options you’ll have to fit your budget. Shop around for lenders and loan programs—sometimes state or local programs can help with down payments or closing costs.

Smart Budget Strategies for Today’s Missouri Homebuyers

While the numbers are higher, there are still ways to make homeownership work for you—even in today’s market. The key is getting creative and focused with your financial planning.

First, consider your timeline. The sooner you start saving, even if it’s just a little each month, the closer you’ll be to reaching your down payment goal. Open a dedicated savings account just for your home fund and set up automatic transfers. This makes saving feel less like a chore and more like a habit.

“Small sacrifices now—like skipping takeout once a week or selling unused items—can add up to big gains when it comes time for your down payment.”

Next, look at your full financial picture. Check your credit report and try to pay down high-interest debts, like credit cards. A higher credit score can help you qualify for better mortgage rates, which lowers the cost of your home over time.

Here are some additional money-smart moves you can try:

• Explore first-time homebuyer programs in Missouri that offer grants or loan assistance
• Consider homes in up-and-coming neighborhoods or those needing a little TLC—they often cost less
• Team up with a real estate agent who’s knowledgeable about your local market and willing to help you negotiate
• Ask lenders about adjustable-rate mortgages vs. fixed-rate (but make sure you’re comfortable with the risks)

If mortgage rates drop in the future, refinancing is an option. But don’t bank on future savings to make things affordable now. Make sure you can handle today’s payments comfortably.

If the market feels tough right now, remember that every step—large or small—gets you closer to your goal. Start tracking your budget, talking to trusted professionals, and learning about all the resources available to you. Getting creative and being persistent can bring homeownership within reach.

Final tip: Homeownership isn’t a race. Take time to plan, research, and save so you can buy with confidence.