What Is Household Income?

The aggregate gross income of all members of a home over a certain age is referred to as household income. Individuals do not have to be related in any manner to be considered members of the same household in some cases. Household income is a valuable economic indication of an area’s level of living and is an essential risk metric used by lenders when underwriting loans.
Household income is defined as the total gross income before taxes obtained by all members of a household above the age of a certain age in a 12-month period (the Census Bureau specifies age 15 and older). Wages, salaries, and self-employment earnings; Social Security, pension, and other retirement income; investment income; welfare payments; and income from other sources are all examples.

Household income is the combined net income of all members of a particular household above a set age limit. It is not necessary for individuals in question to be related in any way to be considered members of the same household. Household income serves as an essential risk measure for lenders who use it for underwriting loans, as well as a useful economic indicator of an area’s standard of living.