It seems like everywhere you turn, someone is talking about prices going up. Inflation rates are high, and incomes don’t seem to be increasing to meet them.

As Americans struggle more and more to afford necessities, big purchases increasingly feel like luxuries. Nowhere is this more true than in the housing market.

But, exactly how much do you need to make to be able to buy a house? Real estate company Redfin has crunched the numbers.

How much money do you need to make to afford a home in America in 2023?

The number currently stands at $114,627, which Redfin reports is “the highest annual income necessary to afford a home on record.” In fact, it’s nearly $40,000 more than the typical household brings in each year!

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So, how did we get here? It’s a combination of mortgage rates and home prices. Mortgage rates recently hit a two-decade high, coming in at 7.57%. The average monthly mortgage payment is now $7,866. Meanwhile, home prices are rising at the same time. The average home in the United States is currently selling for around $420,000.

There are three reasons why houses are so expensive right now.

While buying a house has always been a big investment, there’s something that’s making it even more unattainable now. When average rates are at an all-time high, there is clearly something negatively impacting the market.

Photo: RDNE Stock project / Pexels

According to Yahoo Finance, there are three components.

1. Inventory

The first is the issue of inventory. Allie Garfinkle, Yahoo Finance reporter who spoke at the 2023 SXSW Conference in Austin, Texas, said, “There simply aren’t enough houses on the market to meet the demand that’s out there right now.”

It’s a simple supply and demand problem that we all learned about in school.

2. Government codes and regulations

Additionally, Garfinkle noted that “government codes and regulations are causing a lot of problems when it comes to not only making homes riskier to build, but harder to afford.” Government regulations can add as much as $94,000 to the price of a new home.

3. Economic uncertainty

The last piece of the puzzle is the uncertainty of the economy. Questions about interest rates and a potential recession make it “harder to want to build,” furthering the inventory issue.

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What can you do to afford a house?

Rachel Cruze, daughter of Dave Ramsey and a financial expert in her own right, has offered some tips on how to afford a house, even when you feel like you can’t in this market.

She suggests starting by saving longer. “If you don’t have the money, you shouldn’t buy a house. Period,” she says. Instead, she says prospective homebuyers can work on saving more money over a longer period of time so they can afford a house.

Photo: Ketut Subiyanto / Pexels

Cruze also points out that it is important to have realistic expectations. We all have things we want, but letting go of some of those things might make it easier to find a house in your price range — or, in a market where there aren’t enough houses to go around, just to find a house at all.

If all else fails, Cruze recommends being willing to relocate or switch to a new job. It sounds radical and isn’t an option for everyone, but if it does work for you, it might just help you get the house you’ve been waiting for.

In a world full of economic uncertainty and downturns, it’s not surprising that the real estate market has gotten out of hand. What is surprising is just how bad things have become, and how high interest rates and prices have risen.

What was once considered a solid, steady income isn’t enough to provide your family with a home anymore. As conditions continue to worsen, it’s unclear where the future of the housing market lies.

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Mary-Faith Martinez is a writer for YourTango who covers entertainment and news.