Redfin data pointed to rare relief, but most households still fell short
After nearly five years of steady erosion, homebuying affordability in the US moved in the right direction in December, with Redfin estimating that buyers needed $111,252 to afford the typical home – down 4% from $115,870 a year earlier.
The shift reflected a modest easing in borrowing costs rather than a broad price correction. Redfin’s analysis showed the median home-sale price at $426,747, only slightly higher than a year before, while average mortgage rates hovered around 6.1%, down from nearly 7%.
That combination pushed the typical monthly payment to roughly $2,675, from about $2,800, and improved affordability in 37 of the 50 largest US metros, led by Dallas, Sacramento and Jacksonville.
“The housing affordability crisis is showing signs of easing as costs come down slightly but meaningfully, opening the door for more Americans to make the jump to homeownership,” said Chen Zhao, Redfin’s head of economics research.
“While housing remains historically expensive, the trajectory is finally starting to reverse, with the door to buying a home opening a bit wider rather than closing tighter. But while affordability is improving, Americans are contending with other obstacles on the road to buying a home, like nerves about layoffs and economic uncertainty.”
Affordability gap still locked in for many
The typical American household earned an estimated $86,185 – roughly $25,000 less than what Redfin calculated is needed to comfortably afford the median-priced home.
While the required income has started to fall and median earnings rose about 4% year over year, that gap left lower- and middle‑income buyers largely sidelined.
Only 12 of the 50 largest metros met Redfin’s affordability bar, with Pittsburgh, St. Louis and Cleveland offering the widest budget cushions between local incomes and the income needed to buy a median‑priced property.
Meanwhile, Bankrate’s 2025 affordability survey found that US home affordability is at its worst level in decades, with one in six home shoppers over the past five years giving up on buying entirely.
Dallas leads modest reset in major metros
Affordability improved fastest in Dallas, where the income needed to buy the median‑priced home dropped 7.4% to $112,175. Sacramento followed with a 6.8% decline (to $148,102), and Jacksonville with a 5.9% drop (to $97,898).
In each case, lower monthly payments – for example, about $3,191 in Dallas, roughly $300 less than a year earlier – reflected softer prices and slightly cheaper financing.
However, in Detroit, the income needed to afford the typical home rose 3.6% to $74,912, with Chicago and St. Louis also posting increases despite their reputation as more attainable markets.
In January, Redfin data showed buyers taking longer to commit and pushing harder on price, as “buyers have much more power than they’ve had over the past few years,” Milwaukee‑based Redfin Premier agent Ben Ambroch said.
Meanwhile, Redfin’s 2026 outlook framed the coming years as a “Great Housing Reset,” with incomes finally expected to grow faster than home prices.
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