Glossary
Median household income
The income level at which half of households earn more and half earn less, in a given year and place.
Median household income is the income level that splits all households in a given geography and year exactly in half: half of households earn more than this figure, and half earn less. "Household" income combines the income of everyone living in a housing unit, whether or not they are related, which distinguishes it from family income or per-capita income measures.
The median is preferred over the mean (average) for income data because income distributions are right-skewed: a relatively small number of very high earners pull the mean well above what a typical household actually earns, while the median is unaffected by how extreme the top earners are. Comparisons over time require adjusting for inflation, typically using the consumer price index, to distinguish real income growth from nominal, prices-only increases.
Median household income is a standard input for assessing the poverty headcount ratio, rent burden, and the housing affordability index in a local area, and is often benchmarked against a cost of living index to judge purchasing power rather than raw dollar figures. A common pitfall is comparing median household income across places or over time in nominal terms without adjusting for inflation or local cost of living, which can make two areas or periods look more or less prosperous than they actually are relative to what things cost.
Last reviewed September 22, 2026