New data from Realtor.com highlights the varied costs of purchasing a luxury home across the United States. The report identifies how much potential buyers need to earn annually to afford high-end homes in different states.
In New York, a luxury home averages $5.49 million, necessitating an annual salary of $1.15 million. Conversely, West Virginia offers “luxury” homes for $750,000, requiring an income of $158,000 per year.
“The cost to purchase a luxury home varies greatly across the U.S. In New York and Hawaii, a luxury home will cost you upward of $5 million, while in lower-priced states such as West Virginia, Iowa, Indiana, and Mississippi, the luxury price threshold is less than $800,000,” says Hannah Jones, senior economic research analyst at Realtor.com.
Realtor.com’s economists analyzed the top 5% of homes by price on the market to determine each state’s average luxury home cost. They calculated the minimum salary needed to afford these homes based on current mortgage rates with a 20% down payment using the 30% rule.
“The definition of luxury varies greatly across the country, but to allow for comparison, we consider luxury to be the top 5% of the market by price,” Jones notes.
In Washington D.C., ranked among the top ten most expensive areas for luxury real estate in January 2025, prospective homeowners would require a household income of at least $636,641 annually for properties priced at or above $3 million.
For Alabama’s January 2025 threshold at $1 million and monthly payments around $5,265 excluding taxes and insurance costs—buyers should earn approximately $210,594 yearly.
The analysis also provides examples like California’s historic Italianate Victorian listed at nearly $4.5 million or Florida’s lakefront property valued close to its state’s median mark—each illustrating regional variations within broader trends seen nationwide when assessing what constitutes ‘luxury’ living conditions today throughout America’s diverse housing markets.
