CALCMONEY // HOME AFFORDABILITY // IA // IOWA CITY
How much house can you afford in Iowa City? Based on local median home prices, current IA mortgage rates, and Iowa City property tax data.
$265,000
$1,834/mo
$78,598/yr
$218,303
Monthly housing costs of $1,834 represent 32.4% of Iowa City's median gross monthly income ($5,667/mo). At 32.4%, this slightly exceeds the 28% rule. Buyers need above-median income or a 25%+ down payment to qualify comfortably.
| Median Home Price | $265,000 |
| Down Payment (20%) | $53,000 |
| Loan Amount | $212,000 |
| Monthly PI Payment | $1,403 |
| Monthly Property Tax | $320 |
| Monthly Insurance Est. | $110 |
| Total Monthly PITI | $1,834 |
| Housing Cost % of Income | 32.4% |
| Required Income (28% rule) | $78,598/yr |
| Max Affordable Home | $218,303 |
$9,275
$2,305/mo
Iowa City Home Affordability Quick Reference 2026
| Metric | Value | Notes |
|---|---|---|
| Median Home Price | $265,000 | Iowa City city median |
| Down Payment (20%) | $53,000 | Conventional loan |
| Monthly PITI | $1,834 | 6.95% rate, 30yr fixed |
| Required Income (28% rule) | $78,598 | Annual gross |
| Max Affordable Home | $218,303 | Based on median income |
| FHA Down (3.5%) | $9,275 | Minimum FHA |
| Housing Cost % of Income | 32.4% | Median income: $68,000/yr |
| Property Tax Rate | 1.45% | $3,843/yr on median home |
Monthly PITI includes principal, interest, property tax, and homeowners insurance. Estimates only.
The median home price in Iowa City is $265,000, with a local 30-year mortgage rate of 6.95%. A buyer putting 20% down carries a loan of $212,000, generating a monthly P&I payment of $1,403. Adding property taxes ($320/mo) and homeowners insurance ($110/mo) brings total monthly PITI to $1,834.
Iowa City's property tax rate of 1.45% is near the national average, adding a standard increment to monthly housing costs. On the Iowa City median home, that is $320/month, or $3,843 per year.
Iowa levies a state income tax, which affects take-home pay and effective buying power. High-income earners in Iowa City should factor state tax liability into their overall housing budget — mortgage interest may be deductible on both federal and state returns.
Using the 28% rule, a household earning Iowa City's median income of $68,000/year can afford up to $1,587/month in total housing costs. Based on Iowa City's mortgage rate of 6.95% and property tax rate of 1.45%, that translates to a maximum affordable home price of approximately $218,303 with 20% down on a 30-year loan.
To afford the median Iowa City home priced at $265,000, you need an annual gross income of approximately $78,598. Total monthly housing costs (principal and interest of $1,403, property taxes of $320, and insurance of $110) come to $1,834/month, which equals 28% of the required income.
At the median home price of $265,000 and median household income of $68,000, the total monthly housing cost of $1,834 represents 32.4% of gross monthly income. This slightly exceeds the standard 28% rule. Buyers will need above-median income or a larger down payment to stay within guidelines.
A conventional 20% down payment on the median Iowa City home of $265,000 is $53,000. An FHA loan requires just 3.5% down — $9,275 — but adds mortgage insurance of roughly $181/month, bringing total FHA payments to $2,305/month.
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