In 2024, housing affordability saw a slight improvement, marking the first time in four years that the situation did not get worse. Despite this minor progress, real estate broker Redfin reports buying a home remains a significant challenge for many Americans, with affordability still far from the levels seen in the 2010s.
The report shows that a household earning the median U.S. income of $83,782 would need to allocate 41.8% of their earnings to monthly housing costs if purchasing a median-priced home at $429,734.
This is a marginal improvement from 42.2% in 2023, yet it remains considerably higher than the typical 30% or lower share recorded in the previous decade. Most personal finance advisers say a household should not spend more than 30% of its monthly income on housing.
Redfin Senior Economist Elijah de la Campa noted that the slight improvement in affordability was primarily due to wage growth that outpaced the increase in housing payments. However, he cautioned that homeownership remains largely unattainable for many, with prices expected to continue rising in 2025 due to limited housing supply, pushing more potential buyers towards renting.
“For many Americans, buying a home remains more out of reach than ever and that’s unlikely to change anytime soon,” he said.
To afford the median-priced home without exceeding 30% of their income on housing costs, a buyer would need an annual income of $116,782, which is significantly higher than the median household income.
The median monthly housing payment reached a record $2,920 in 2024, up 4.3% from the previous year and 86% higher than in 2019. Although mortgage rates slightly decreased to an average of 6.72% from 6.81% in 2023, the income required to maintain affordable payments remains beyond the reach of many households.
The biggest improvement was in Texas
Texas metropolitan areas showed notable improvements in affordability. Austin led with the most significant improvement, where the percentage of income spent on housing dropped from 42.8% in 2023 to 39.6% in 2024. This trend is attributed to increased housing construction and a shift in demand during the pandemic. Other Texas metros like San Antonio, Dallas, and Fort Worth also saw improvements.
At the same time, cities like Anaheim, Calif., experienced the largest decrease in affordability, with housing costs consuming 75.9% of the median income, up from 71.8% in 2023. This was driven by soaring home prices, with Anaheim posting a 12.4% increase in 2024.
California dominated the list of least affordable metros, with Los Angeles, San Francisco, and San Diego among the top. In contrast, Rust Belt cities like Pittsburgh and Detroit remained among the most affordable, with housing costs well below the 30% income threshold.