Americans now need to earn $111,252 a year to afford the typical U.S. home for sale. That figure is down 4% from $115,870 a year ago, according to a new Redfin analysis.
Redfin said the income needed to buy a home has been falling since November 2025. It follows nearly five years when affordability generally got worse as home prices surged during the pandemic-era boom. Redfin said the required income peaked at over $122,000 in June 2025 before starting to decline.
The company defines “affordable” as spending no more than 30% of income on monthly housing payments for a buyer with a mortgage. The analysis uses median home-sale prices, mortgage rates, and property-tax payments. The report focuses on December 2025, which Redfin said is the most recent period with available data.
Redfin tied the improvement to lower borrowing costs and slower price growth. The median U.S. home-sale price was $426,747, which Redfin described as only slightly higher than a year earlier. Average mortgage rates were around 6.1%, down from nearly 7% a year ago, pushing the median monthly mortgage payment to about $2,675 from roughly $2,800.
Affordability improved in 37 of the 50 most populous U.S. metro areas. Dallas posted the biggest year-over-year improvement, with the income needed to buy the median-priced home falling 7.4% to $112,175. Sacramento was next, down 6.8% to $148,102, followed by Jacksonville, down 5.9% to $97,898.
The report also found that some metro areas moved the other way. Detroit had the biggest increase, with the required income rising 3.6% to $74,912. Chicago was up 3.5% to $105,440, and St. Louis rose 3% to $73,984.
According to the report, there are 12 large metros where the typical household earns enough to afford the median-priced home. It listed Pittsburgh, St. Louis, and Cleveland as the top three, based on the gap between typical local income and the income needed to afford a home.
“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. Zhao added that “housing remains historically expensive,” and pointed to “nerves about layoffs and economic uncertainty” as continuing obstacles for buyers.
Even with the recent improvement, Redfin said the typical household still falls short. The typical American household earns an estimated $86,185, which Redfin said is about $25,000 less than what is needed to afford the median-priced home.
Redfin said median household income rose about 4% from 2024 to 2025, and its economists expect affordability to keep improving gradually as wages rise while housing costs stay mostly stagnant.
The Trump administration has taken several actions it says are aimed at improving housing affordability.
In January 2026, President Trump directed government-sponsored enterprises Fannie Mae and Freddie Mac to purchase up to $200 billion in mortgage-backed securities. Trump said the aim was to push down mortgage rates.
The White House has also issued an executive order to curb large institutional investors from buying single-family homes, arguing it will leave more inventory for individual buyers.