(How) Can Pastors Afford to Buy a House Anymore?

Is buying a home even an option for pastors anymore? With home prices soaring 50% over the last five years and salaries not keeping up, the dream of home ownership is slipping further out of reach. Today, we’ll break down why owning a home is harder than ever for pastors and how some are finding creative ways to make it work.

Links for Today's Show

• Watch the YouTube Video of this episode
• Like My Show and Want to Support it? Buy Me a Coffee 
• Free PDF Download: How to Know if Starting a Business is Right for You

Buy Me a Coffee?

Want to show your support for the show and the content I'm creating to help pastors, missionaries, and other ministry leaders? Now you can through a crowdfunding site called Buy Me a Coffee! You can go to www.buymeacoffee.com/richavery and give $5 to buy me one cup of coffee, $10 to buy me two cups, or give any amount you’d like. Your gift will be a huge blessing and encouragement to me and help me cover the costs associated with hosting the website, podcast, and more. Thanks for your support!

Can Pastors Afford to Buy a House Anymore?

Did you know that the median home sale price in the U.S. has risen 50% over the last five years?

I was shocked when I read that recently. But then again, I guess I shouldn’t have been too surprised, knowing how much some of my young adult kids are paying for housing these days!

The median sale price of homes in the U.S. at the end of 2024 was...wait for it...$420,400!

When I saw this, an unsettling question came to my mind:

Can pastors afford to buy a house anymore?

Pastor Salaries Have Not Kept Pace with Rising Housing Costs

Rising home prices and higher mortgage interest rates are pushing monthly housing payments out of reach for many prospective buyers. And expectations are that prices will continue to rise due increased demand and an ongoing shortage of housing across the country.

I believe this creates a very difficult situation for pastors, especially younger ones starting out in ministry and raising a family. Because pastoral salaries by and large have not kept pace with rising housing costs.

How many churches have been able to increase salaries 50% over the last five years? Or even 25%?

I think you and I both know the answer to that.

The situation becomes even more challenging in high-cost states like California, where the median home price is more than $700,000! With home prices significantly higher than the national average, the dream of home ownership for many pastors in those areas feels impossible.

Is 40% the New 30% When it Comes to Affording a Home?

For as long as I can remember, the general rule of thumb for home affordability was to spend no more than 30% of your gross monthly income on housing expenses, including mortgage, taxes and insurance. Some financial advisors like Dave Ramsey suggest no more than 25%.

Sadly, the new normal in some high-priced markets has buyers paying 40% or more of their gross income for housing.

This just doesn’t seem advisable to me, or even possible for most people - especially for those in ministry.

Is the Dream of Home Ownership Slipping Away for Pastors?

So will home ownership become out of reach for pastors? It’s a troubling question, but one we need to face. If church salaries continue to lag behind inflation and housing costs, future pastors may find it nearly impossible to own a home without having additional sources of income.

How Can Pastors Afford to Buy a House Anymore?

So how can pastors afford to buy a house given today’s high prices and stagnant wages? Here are five ways to make it work.

1. 40-year and Interest-Only Mortgages

The most common mortgage in America is the 30-year mortgage. But some brokers are now offering a 40-year mortgage. It typically offers lower monthly payments on one hand, but higher rates and slower equity growth on the other.

With interest-only mortgages the buyer’s monthly payment covers the interest only, not the principal, for a fixed term. Though they often have provisions allowing you to make payments toward the principal at any time.

Both of these mortgages are generally considered more risky options, and advisable only when you’re assured the value of the home will significantly appreciate in value by the time you’re ready to sell.

2. Working Spouse

One common solution is for the pastor’s spouse to work. A dual-income household significantly improves the chances of affording a home. But this isn’t always possible or practical  - especially for families with young children.

3. House Hacking

House Hacking means finding ways to generate income from your home. One way is to buy a duplex, living in one half while you rent out the other half. Other ways include: Finding housemates to rent out a portion of your home, listing your home or a room on AirBNB, renting out a portion of your home or property for storage, renting out your pool or sports courts, etc. I share more about this in episode 22, entitled 10 Ways to Make $500 a Month Renting Out Stuff You Already Own.

4. Pastor Launching their Own Business or Side Hustle

Another popular approach is for pastors to create income outside the church by starting their own business side hustle.

Pastors have so many skills that can be leveraged into things like consulting, coaching, writing, or other entrepreneurial ventures. These activities not only generate extra income but can also provide a creative and fulfilling outlet beyond church responsibilities.

Not sure how you could leverage your skills into extra income outside the church? In episode 29 I share 11 Ways Pastors Can Leverage Their Ministry Skills in the Marketplace - just to help jump-start your idea generation.

5. Church Shifting from Full-Time to Co-Vocational Pastor Model

Increasingly, I believe churches will need to rethink how they support their pastors, whether that means increasing salaries in line with local cost-of-living changes, or shifting to a co-vocational ministry model, freeing up the pastor to pursue other employment or their own business outside the church.

I do believe that co-vocational pastors are the future of the church. I talk more about this in episode 37, entitled, Is Your Church Still Trying to Live in a World That No Longer Exists?.

Application & Action

So what do you think? Is buying a home even an option for pastors anymore? Is it time for churches and pastors to find creative ways to make it work today?

The rising cost of housing is a complex problem that won’t be solved overnight. But if church leaders can be serious about addressing the issue and give their pastors fair compensation that keeps pace with inflation, or if not, begin to explore co-vocational solutions that allow pastors to create income outside the church, we can help ensure that pastors can serve God and provide for their families, no matter what.

Are you a pastor who is facing the affordable housing challenge now? What strategies have worked for you? Or is it time for you to explore one of the options mentioned here? If I can be of help to you or your church, please let me know. You can reach me at [email protected].