A mortgage payment on a typical home is forecast to be affordable in 20 major metropolitan areas by the end of the year, according to the latest market report from Zillow®. That’s the highest rate for affordable homes since 2022.
Zillow expects slow but steady home value growth, falling mortgage rates and rising incomes to contribute to a nationwide improvement in affordability this year. Affordability in this case means a mortgage payment on a typical house that doesn’t require more than 30% of the median household income. When housing costs rise above that 30% threshold, they become a financial burden, leaving less in the budget for other essentials, such as groceries and transportation.
READ MORE: Here is the outlook for Phoenix’s 2026 housing market
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In the five years preceding the pandemic, mortgage payments (including taxes, insurance and maintenance) on a typical U.S. home required between 22.5% and 26.5% of median household income, assuming a 20% down payment.
Prices soared starting in 2020, and affordability declined sharply in 2022, when mortgage rates doubled. Affordability reached all-time lows in October 2023, when a typical mortgage required 38.2% of median household income. Homes in just seven of the nation’s 50 largest metros were affordable to buy at that time.
At the national level, a mortgage payment now takes 32.6% of median household income, already the best affordability seen nationwide since August 2022. That’s on track to improve to 31.8% by the end of the year.
“This is what a small-wins year looks like for housing,” said Zillow Senior Economist Kara Ng. “Rising incomes, subdued price growth, and gradually easing mortgage rates would help buyers regain their footing while allowing homeowners to continue building wealth. These types of slow and steady affordability improvements are exactly what the housing market needs over the long-run.”
Key assumptions for Zillow’s forecast:
- Mortgage rates fall to near 6%, where Zillow expects them to end the year — although mortgage rates are notoriously volatile, and even further declines are possible.
- Home values grow by 1.9%, with the typical U.S. home value ending the year at $365,795 — higher than in 2025 but rather subdued compared to long-term norms.
- Incomes are expected to rise by 3.3% this year, according to Bloomberg consensus estimates.
This forecast also assumes borrowers put 20% down on their mortgage, which is a tall hurdle. Today, the typical home nationwide is valued at $359,078, according to the Zillow Home Value Index. A 20% down payment for that home is nearly $71,800. This would grow to over $73,000 by the end of the year, based on Zillow’s appreciation forecast. A smaller down payment for the same purchase would raise monthly costs and impact affordability.
Using the average mortgage rate from December (6.2%) and assuming a 20% down payment, the monthly cost for a typical home today is $2,337 including taxes, insurance, principal and interest. That’s down $92 per month from a year ago, and down $177 from a peak in October 2023. If Zillow’s outlook holds, that mortgage payment should reach $2,358 by the end of the year.
The only major metro where affordability is expected to worsen in 2026 is Hartford, which Zillow predicts will be the hottest market for 2026. This widespread rise in affordability is doubly impressive because it’s not predicated on home value depreciation; home values are expected to rise in 41 of the 50 largest metros, including Chicago, Atlanta and Raleigh.
Tips to improve personal affordability and shop within budget
Down payment assistance programs can help buyers clear that particular hurdle. By answering a few questions, shoppers on Zillow can see all the programs available for a particular listing.
“Preparation doesn’t just make the process smoother — it can change the outcome,” said Ng. “Knowing your numbers ahead of time helps buyers compete without overreaching. And for many first-time buyers, exploring down payment assistance programs on the Zillow listing is a low-effort way to clear a financial hurdle.”
Mortgage rates play a major role in determining buying power. Zillow Home Loans’ BuyAbilitySM tool tracks current rates to make sure search results stay within a shopper’s set monthly budget.
| Metro Area* | Zillow Home Value Index (ZHVI) | Expected Home Value Growth by End of 2026 | Monthly Mortgage Cost (20% Down) | Expected Change in Mortgage Cost by End of 2026 | Share of Median Household Income Spent on Mortgage (Affordability) | Expected Affordability by End of 2026 |
| United States | $359,078 | 1.9 % | $2,337 | $21 | 32.6 % | 31.8 % |
| New York, NY | $703,649 | 1.5 % | $4,833 | $30 | 55.4 % | 53.9 % |
| Los Angeles, CA | $942,285 | 1.4 % | $5,697 | $18 | 67.3 % | 65.4 % |
| Chicago, IL | $336,642 | 1.8 % | $2,404 | $23 | 30.4 % | 29.7 % |
| Dallas, TX | $358,609 | 0.3 % | $2,550 | -$15 | 31.3 % | 30.1 % |
| Houston, TX | $303,084 | 0.8 % | $2,119 | -$3 | 29.8 % | 28.8 % |
| Washington, DC | $568,566 | 0.1 % | $3,617 | -$33 | 32.8 % | 31.5 % |
| Philadelphia, PA | $374,909 | 2.2 % | $2,541 | $33 | 31.9 % | 31.3 % |
| Miami, FL | $466,944 | 2.8 % | $3,312 | $62 | 46.7 % | 46.1 % |
| Atlanta, GA | $374,477 | 2.0 % | $2,473 | $26 | 30.6 % | 29.9 % |
| Boston, MA | $710,709 | 1.8 % | $4,553 | $35 | 44.0 % | 42.9 % |
| Phoenix, AZ | $443,733 | 0.7 % | $2,622 | -$9 | 33.2 % | 32.0 % |
| San Francisco, CA | $1,101,500 | -1.7 % | $6,766 | -$180 | 56.8 % | 53.5 % |
| Riverside, CA | $577,093 | 2.2 % | $3,607 | $42 | 45.2 % | 44.3 % |
| Detroit, MI | $256,357 | 2.0 % | $1,739 | $19 | 26.1 % | 25.5 % |
| Seattle, WA | $730,730 | 0.4 % | $4,567 | -$28 | 46.6 % | 44.9 % |
| Minneapolis, MN | $377,251 | -0.3 % | $2,562 | -$33 | 30.0 % | 28.7 % |
| San Diego, CA | $916,964 | 1.9 % | $5,538 | $49 | 57.6 % | 56.2 % |
| Tampa, FL | $352,009 | 1.6 % | $2,426 | $17 | 35.3 % | 34.4 % |
| Denver, CO | $559,554 | -1.1 % | $3,467 | -$73 | 36.7 % | 34.7 % |
| Baltimore, MD | $391,913 | 0.4 % | $2,522 | -$13 | 29.3 % | 28.2 % |
| St. Louis, MO | $263,846 | 1.7 % | $1,841 | $15 | 25.9 % | 25.2 % |
| Orlando, FL | $381,302 | 1.9 % | $2,573 | $25 | 36.2 % | 35.4 % |
| Charlotte, NC | $380,135 | 2.6 % | $2,371 | $38 | 31.4 % | 30.9 % |
| San Antonio, TX | $274,336 | -0.4 % | $1,983 | -$25 | 28.9 % | 27.7 % |
| Portland, OR | $536,849 | -0.6 % | $3,402 | -$55 | 39.1 % | 37.2 % |
| Sacramento, CA | $568,802 | -0.6 % | $3,574 | -$55 | 41.2 % | 39.3 % |
| Pittsburgh, PA | $218,845 | 0.0 % | $1,519 | -$15 | 22.3 % | 21.4 % |
| Cincinnati, OH | $297,209 | 2.4 % | $2,034 | $29 | 28.6 % | 28.1 % |
| Austin, TX | $419,798 | -1.9 % | $2,973 | -$82 | 34.3 % | 32.2 % |
| Las Vegas, NV | $426,434 | 1.3 % | $2,536 | $5 | 36.3 % | 35.2 % |
| Kansas City, MO | $312,751 | 2.2 % | $2,161 | $28 | 29.4 % | 28.9 % |
| Columbus, OH | $319,035 | 2.4 % | $2,188 | $31 | 30.0 % | 29.5 % |
| Indianapolis, IN | $284,684 | 2.6 % | $1,874 | $30 | 27.0 % | 26.6 % |
| Cleveland, OH | $238,517 | 2.9 % | $1,723 | $35 | 28.1 % | 27.7 % |
| San Jose, CA | $1,557,691 | -0.6 % | $9,289 | -$150 | 63.2 % | 60.2 % |
| Nashville, TN | $446,311 | 2.2 % | $2,726 | $31 | 35.2 % | 34.4 % |
| Virginia Beach, VA | $359,881 | 2.0 % | $2,371 | $25 | 32.9 % | 32.2 % |
| Providence, RI | $502,821 | 3.3 % | $3,297 | $77 | 46.1 % | 45.6 % |
| Jacksonville, FL | $343,902 | 1.4 % | $2,317 | $12 | 32.3 % | 31.5 % |
| Milwaukee, WI | $366,247 | 2.6 % | $2,365 | $38 | 34.8 % | 34.3 % |
| Oklahoma City, OK | $239,880 | 1.9 % | $1,725 | $18 | 26.9 % | 26.3 % |
| Raleigh, NC | $429,840 | 1.7 % | $2,719 | $18 | 30.4 % | 29.6 % |
| Memphis, TN | $239,011 | 1.2 % | $1,647 | $4 | 27.7 % | 26.9 % |
| Richmond, VA | $381,554 | 2.4 % | $2,412 | $34 | 33.3 % | 32.7 % |
| Louisville, KY | $270,246 | 1.3 % | $1,759 | $6 | 27.2 % | 26.4 % |
| New Orleans, LA | $250,088 | -4.5 % | $1,953 | -$104 | 35.8 % | 32.8 % |
| Salt Lake City, UT | $556,976 | 1.1 % | $3,336 | $1 | 37.9 % | 36.7 % |
| Hartford, CT | $380,135 | 4.5 % | $2,761 | $100 | 33.5 % | 33.6 % |
| Buffalo, NY | $272,868 | 3.1 % | $1,675 | $35 | 26.6 % | 26.3 % |
| Birmingham, AL | $251,913 | 0.4 % | $1,599 | -$10 | 24.2 % | 23.3 % |
