The housing market has yet to fully emerge from its winter hibernation, but improving affordability points to a more active home shopping season this spring. A median-income U.S. household can now comfortably afford a $331,483 home with a 20% down payment. That’s $30,000 more than a year ago, according to a new Zillow® analysis, thanks to rising incomes and lower mortgage rates. In Metro Phoenix, home buying power has increased nearly $40,000 thanks to rising incomes and lower mortgage rates.
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The typical mortgage payment — excluding taxes and insurance, and assuming a 20% down payment — is 8.4% lower than a year ago. Home value growth has flattened, and mortgage rates have fallen from an average of 6.96% in January 2025 to 6.1% last month, while incomes have edged higher. Together, those factors have given a median-income household an extra $30,302 in buying power.
Buying power is now at its highest level since March 2022, when mortgage rates were still below 5%. The recent low point was in October 2023 at $272,224. Mortgage rates averaged 7.62% that month, the highest average in any month since 2000. Zillow expects rates to fall further through 2026, which would unlock additional buying power for home shoppers.
“A more than $30,000 gain in buying power is meaningful for households that have been stretched thin by high rates. It can mean the difference between settling and choosing,” said Kara Ng, senior economist at Zillow. “That doesn’t suddenly make this market affordable for everyone, but it does crack open doors that had firmly shut when rates peaked.”
The dip in mortgage rates brings the biggest boosts to buying power in expensive markets. In San Jose, a median-income household has gained nearly $74,000 in buying power compared to a year ago, the largest increase among major metro areas. San Francisco buyers have seen a $56,115 boost, followed by Washington, D.C. ($48,881), San Diego ($46,506) and Boston ($46,390).
In practical terms, a median-income household can now afford roughly 82,300 more homes for sale than it could a year ago. In addition to improved affordability, that also reflects the continued inventory recovery, with 6% more homes on the market in January than a year earlier. The nearly 447,000 homes a median-income household could afford today represent 40.3% of listings — up from 34.8% a year ago.
In markets where home values have fallen, buyers’ dollars stretch even further in real terms with today’s lower mortgage rates. Houston leads the nation in affordable inventory growth, with just under 4,000 more listings within reach for a median-income buyer compared to a year ago. Phoenix follows with 3,434 additional affordable homes, ahead of Dallas (3,267), Miami (2,981) and Atlanta (2,279). Home values have fallen since last year in each of those markets.
For shoppers tracking how much home they can afford, Zillow Home Loans’ BuyAbility℠ tool provides a personalized estimate based on income, credit profile and current mortgage rates.
| Metro Area* | January 2026: Affordable Home Price** | January 2025: Affordable Home Price** | January 2026: Affordable Homes for Sale | January 2025: Affordable Homes for Sale |
| United States | $331,483 | $301,181 | 446,982 | 364,688 |
| New York, NY | $381,237 | $346,450 | 5,831 | 4,718 |
| Los Angeles, CA | $421,030 | $379,754 | 1,107 | 447 |
| Chicago, IL | $299,770 | $274,738 | 7,385 | 6,807 |
| Dallas, TX | $347,681 | $319,291 | 10,979 | 7,712 |
| Houston, TX | $298,282 | $274,173 | 12,176 | 8,180 |
| Washington, DC | $519,441 | $470,560 | 6,000 | 4,028 |
| Philadelphia, PA | $346,797 | $315,469 | 6,112 | 5,400 |
| Miami, FL | $300,704 | $276,987 | 15,903 | 12,922 |
| Atlanta, GA | $362,571 | $330,769 | 12,551 | 10,272 |
| Boston, MA | $488,388 | $441,998 | 1,296 | 857 |
| Phoenix, AZ | $403,247 | $363,929 | 7,951 | 4,517 |
| San Francisco, CA | $581,564 | $525,449 | 1,119 | 927 |
| Riverside, CA | $383,591 | $347,348 | 2,365 | 1,579 |
| Detroit, MI | $295,016 | $268,220 | 7,472 | 6,202 |
| Seattle, WA | $474,197 | $428,713 | 1,551 | 1,057 |
| Minneapolis, MN | $376,963 | $343,188 | 3,994 | 3,166 |
| San Diego, CA | $477,571 | $431,066 | 675 | 339 |
| Tampa, FL | $300,751 | $276,525 | 7,012 | 5,298 |
| Denver, CO | $456,008 | $413,858 | 3,458 | 2,284 |
| Baltimore, MD | $397,748 | $360,892 | 3,856 | 3,055 |
| St. Louis, MO | $323,200 | $293,885 | 4,157 | 3,691 |
| Orlando, FL | $317,511 | $290,729 | 4,503 | 3,435 |
| Charlotte, NC | $368,639 | $333,655 | 4,134 | 3,069 |
| San Antonio, TX | $306,964 | $280,783 | 5,939 | 4,266 |
| Portland, OR | $409,554 | $371,095 | 1,585 | 1,003 |
| Sacramento, CA | $414,910 | $375,909 | 766 | 487 |
| Pittsburgh, PA | $290,949 | $265,388 | 3,798 | 3,482 |
| Cincinnati, OH | $337,330 | $305,421 | 2,985 | 2,590 |
| Austin, TX | $400,113 | $365,254 | 4,176 | 2,637 |
| Las Vegas, NV | $354,612 | $319,946 | 3,174 | 1,958 |
| Kansas City, MO | $341,641 | $309,997 | 3,254 | 2,651 |
| Columbus, OH | $320,891 | $292,086 | 2,137 | 1,806 |
| Indianapolis, IN | $318,055 | $288,936 | 3,626 | 2,835 |
| Cleveland, OH | $256,197 | $233,539 | 2,468 | 2,229 |
| San Jose, CA | $741,686 | $667,829 | 309 | 185 |
| Nashville, TN | $386,511 | $349,332 | 2,417 | 1,535 |
| Virginia Beach, VA | $326,882 | $297,057 | 2,336 | 1,935 |
| Providence, RI | $331,074 | $300,051 | 264 | 223 |
| Jacksonville, FL | $360,891 | $327,689 | 4,732 | 4,174 |
| Milwaukee, WI | $317,719 | $287,377 | 1,292 | 1,150 |
| Oklahoma City, OK | $264,580 | $242,926 | 2,679 | 2,064 |
| Raleigh, NC | $425,344 | $385,921 | 2,052 | 1,278 |
| Memphis, TN | $251,449 | $230,433 | 2,322 | 1,776 |
| Richmond, VA | $344,191 | $311,553 | 904 | 751 |
| Louisville, KY | $300,159 | $272,361 | 2,253 | 1,564 |
| New Orleans, LA | $203,102 | $188,386 | 1,335 | 927 |
| Salt Lake City, UT | $444,089 | $399,999 | 970 | 531 |
| Hartford, CT | $343,486 | $313,010 | 573 | 546 |
| Buffalo, NY | $310,106 | $279,742 | 932 | 756 |
| Birmingham, AL | $312,379 | $283,544 | 2,840 | 2,262 |
* Table ordered by market size
** For a median-income household to spend no more than 30% of income on the monthly mortgage payment, excluding taxes and insurance, and assuming a 20% down payment
