Housing affordability improved in half of the largest US markets last year; see the list

Buying a home became more affordable in 2024, but only by the slimmest of margins, according to a new study.

Real Estate company Redfin’s analysis estimated monthly housing payments for the typical homebuyer using median home sale prices, monthly mortgage rates, median household incomes and the assumption of a 15% down payment.

Homebuying was slightly more affordable in 2024

What we know:

According to the study, last year was still the second least affordable homebuying year on record, surpassed only by 2023.

By the numbers:

The data found that a household making the $83,782 median U.S. income in 2024 would have had to spend 41.8% of their earnings on monthly housing costs if they bought the $429,734 median-priced U.S. home. 

FILE - A for sale sign is displayed outside of a home for sale on Aug. 16, 2024, in Los Angeles, California. (Photo by PATRICK T. FALLON/AFP via Getty Images)

That’s a slight improvement from 42.2% in 2023, but is considerably less affordable than the typical share of 30% or lower recorded throughout the 2010s.

What they're saying:

"Affordability improved ever so slightly this year because wage growth outpaced the growth in monthly housing payments," Redfin’s senior economist Elijah de la Campa said in a statement. "But that’s not to say buying a home became affordable. For many Americans, buying a home remains more out of reach than ever and that’s unlikely to change anytime soon." 

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He added, "Even with inventory trending upwards, we still expect prices to continue rising in 2025 due to a lack of homes for sale—pushing more would-be homebuyers to rent instead."

Texas metros top list for improved affordability in 2024

By the numbers:

In Austin, Texas, a household making the $103,717 median income in 2024 would have had to spend 39.6% of their earnings on monthly housing costs if they bought the $444,928 median-priced home there, down from 42.8% in 2023. 

That was the biggest improvement in affordability among the 50 most populous U.S. metropolitan areas. 

The backstory:

Redfin cited housing construction which boomed in Texas in recent years, especially during the COVID-19 pandemic when remote workers flocked to more affordable metros in the Sun Belt. 

Following Austin, the next four metros in order of improved affordability were San Antonio, Dallas, Fort Worth and Portland.

Where home affordability improved

  1. Austin, TX
  2. San Antonio, TX
  3. Dallas, TX
  4. Fort Worth, TX
  5. Portland, OR
  6. Tampa, FL
  7. Houston, TX
  8. Orlando, FL
  9. San Francisco, CA
  10. Denver, CO
  11. Sacramento, CA
  12. Nashville, TN
  13. Atlanta, GA
  14. Phoenix, AZ
  15. Minneapolis, MN
  16. Indianapolis, IN
  17. Jacksonville, FL
  18. Charlotte, NC
  19. Boston, MA
  20. Pittsburgh, PA
  21. Los Angeles, CA
  22. Oakland, CA
  23. St. Louis, MO
  24. Kansas City, MO

California leads list of least affordable metro

By the numbers:

On the other end of the spectrum was Anaheim, CA, where a household making the $121,925 median income in 2024 would’ve had to spend 75.9% of their earnings on monthly housing costs if they bought the $1,165,965 median-priced home.

That’s up from 71.8% in 2023—the biggest jump among the top 50 metros. 

Next came Chicago, Miami, Newark, New Jersey, and San Jose, California. 

The backstory:

Housing affordability worsened in those metros largely because home prices soared. Anaheim posted a 12.4% increase in home prices in 2024 – the biggest jump among the major metros, while the other metros in the top five posted gains higher than the national level (4.8%). 

Where home affordability did not improve

  1. Anaheim, CA
  2. Chicago, IL
  3. Miami, FL
  4. Newark, NJ
  5. San Jose, CA
  6. West Palm Beach, FL
  7. Fort Lauderdale, FL
  8. New Brunswick, NJ
  9. Providence, RI
  10. Seattle, WA

Homebuyers need to earn $116,782 to afford typical home

What we know:

In 2024, a homebuyer needed to earn an annual income of at least $116,782 if they wanted to spend no more than 30% of their earnings on monthly housing payments for the median-priced home, the study found. 

What they're saying:

"That’s a record high and is $33,000 more than the typical household makes in a year," Redfin said, noting that the rule of thumb in personal finance is that people should spend no more than 30% of their income on housing, though this rule has become harder to follow as housing costs have soared. 

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