Let’s say you’re earning $25 an hour, working full-time, and you’ve started wondering:
“Could I actually afford to buy a home?”
You’re not alone with rent prices rising and mortgage rates bouncing all over the place, many people are exploring homeownership even with a modest income.
And yes, it is possible to buy a home making $25/hour — but it depends on several factors.
In this post, we’ll break it all down for you:
- How much that hourly wage adds up to annually
- The 28/36 rule and why it matters
- Realistic home price ranges
- Other monthly expenses to consider
- Tools and strategies to boost affordability
First: What Does $25 an Hour Look Like Annually?
If you work full-time (40 hours/week), 52 weeks a year:
$25 x 40 hours = $1,000/week
$1,000 x 52 weeks = $52,000/year (before taxes)
Now let’s estimate your take-home pay after taxes and deductions.
After taxes, health insurance, and Social Security, most people take home ~75% of their gross income.
That gives you about $39,000/year, or $3,250/month to work with.
The 28/36 Rule: How Much Should You Spend on a House?
Lenders use a common guideline to determine how much house you can afford:
- 28% Rule: No more than 28% of your gross monthly income should go to your mortgage (principal + interest + property taxes + insurance).
- 36% Rule: Total debt (including car loans, credit cards, student loans) should stay below 36% of your gross monthly income.
Here’s the math for $52,000/year:
| Monthly Income (Gross) | 28% Housing Budget | 36% Total Debt Limit |
|---|---|---|
| ~$4,333 | ~$1,213/month | ~$1,560/month |
So your ideal monthly mortgage payment should be around $1,200 or less.
How Much House Does That Buy in 2025?
To calculate affordability, we’ll make a few assumptions:
- 30-year fixed mortgage
- 6.5% interest rate (typical as of 2025)
- 3.5% down payment (FHA loan)
- $250/month in taxes + insurance
| Home Price | Down Payment (3.5%) | Estimated Monthly Mortgage |
|---|---|---|
| $150,000 | $5,250 | ~$1,100 |
| $175,000 | $6,125 | ~$1,280 |
| $200,000 | $7,000 | ~$1,460 |
👉 Based on this, if you make $25 an hour, you can likely afford a home priced between $150,000 and $180,000, depending on:
- Credit score
- Other debt (car loans, student loans)
- Down payment
- Property taxes in your area
What Other Expenses Should You Budget For?
Buying a house isn’t just about the mortgage. You’ll also need to account for:
- 🏡 Property taxes
- 🔒 Homeowners insurance
- 💡 Utilities (electricity, gas, water, internet)
- 🔧 Maintenance (roof, appliances, plumbing)
- 💸 HOA fees (if applicable)
A good rule of thumb: budget 1% of the home’s value annually for repairs and upkeep.
First-time homebuyer? You’ll want to read this affordability guide based on hourly wages.
👉 First-Time Home Buyer Affordability Guide
How to Boost Affordability
If you’re on the edge of qualifying, here are some ways to stretch your buying power:
- Improve your credit score
- Better scores = lower interest = lower monthly payment
- Pay off other debts
- Reducing your car payment or credit cards can improve your debt-to-income ratio
- Consider first-time homebuyer programs
- Many states offer down payment assistance or reduced closing costs
- Look in lower-tax areas or rural zones
- Property taxes and insurance can vary significantly by region
- Increase your down payment
- Even $1,000 more can make a big difference in interest paid
Let’s Do the Math
Let’s say you’re buying where you can still find homes under $180,000 in certain suburbs.
At 6.5% interest, with a $6,000 down payment, your total mortgage + tax + insurance could come to:
$1,150/month → Right on target for the 28% rule
Leftover for everything else: ~$2,100/month
That’s tight — but manageable with good budgeting.
Can You Really Buy a House on $25 an Hour?
Yes — but you need to be strategic.
You’ll likely be shopping in the $150,000–$180,000 range, depending on your debt and local property taxes.
Staying within your budget, taking advantage of loan programs, and improving your credit can all help you qualify and feel confident.
Remember: it’s not about buying the biggest house — it’s about buying the right house that fits your lifestyle and your wallet.
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