Is Home Buying Becoming More Affordable?

For the last few years, “affordability” has felt like a disappearing act.

Home prices jumped. Mortgage rates doubled. And even when prices cooled, the monthly payment stayed punishing. The result was a housing market where many buyers could technically qualify, but couldn’t realistically breathe.

Zillow’s latest outlook suggests that the dynamic is changing. Not dramatically. Not overnight. But in a way that matters.

By Zillow’s definition, home buying becomes “affordable” when the mortgage payment on a typical home costs no more than 30% of the area’s median household income. Cross that line and housing starts to behave like a budget squeeze, crowding out essentials like transportation and groceries.

Zillow forecasts that by the end of 2026, 20 of the 50 largest U.S. metros will meet that affordability threshold, which would be the highest count since 2022.

So yes, home buying is becoming more affordable in more places. But the more useful question is why.

Less “Intense” Payments

The last time affordability felt normal was the pre-pandemic era.

In the five years leading up to 2020, Zillow estimates a typical mortgage payment required between 22.5% and 26.5% of median household income (assuming 20% down, including taxes, insurance, and maintenance). That’s the zone where housing costs still leave room for everything else. 

Then the market snapped.

Prices surged starting in 2020. And by 2022, rates doubled, which is when affordability truly collapsed. Zillow notes that affordability hit all-time lows in October 2023, when a typical mortgage required 38.2% of median household income nationwide. At that point, only seven of the 50 largest metros were affordable by Zillow’s 30% definition. 

Now compare that to today.

Zillow reports that a mortgage payment currently takes 32.6% of median household income, which is already the best national affordability reading since August 2022. And Zillow expects it to improve further to 31.8% by the end of 2026.

That’s still above the 30% “affordable” threshold nationally, but it’s a meaningful shift. It’s the difference between suffocating and strained.

The Biggest Story: Direction Not Destination

A lot of buyers are waiting for a crash. Zillow’s forecast doesn’t support that.

In fact, Zillow frames the next stage of affordability as a recovery that happens without a price collapse. They expect home values to rise 1.9% nationally by the end of 2026, with the typical U.S. home value reaching $365,795. And values are expected to increase in 41 of the 50 largest metros.

That’s important because it changes how you should interpret “affordability improving.”

It’s not that homes are suddenly cheap. It’s that the ingredients of the monthly payment are becoming less hostile at the same time:

• Mortgage rates gradually ease
  
• Income rises
  
• Price growth remains subdued
  

Zillow calls this a “slow, gradual change” path. Not a quick fix. But a stabilizing one that helps buyers regain footing while homeowners continue building equity. 

Why Affordability Improves Even if Prices Increase

This comes down to a simple reality: payments are more sensitive to rates and income than most people realize.

Zillow’s forecast assumptions are clear:

1. Mortgage rates fall to near 6% by end of 2026
   
2. Home values rise 1.9% nationally.
   
3. Incomes rise 3.3%, per Bloomberg Consensus.
   
4. 20% down payment assumption.
   

Put that together and you get something rare: affordability improves while prices still go up.

Even Zillow’s mortgage cost math tells the story.

Using the average mortgage rate from December (6.2%) and assuming 20% down, Zillow estimates the typical monthly mortgage cost today is $2,337 (including taxes, insurance, principal and interest). That’s $92 less per month than a year ago, and $177 lower than the October 2023 peak. Zillow expects the payment to reach $2,358 by the end of 2026.

In other words, Zillow expects affordability gains even while the payment edges slightly upward, because incomes rise and affordability is measured as a share of income.

That’s a subtle point most headlines miss.

Where Affordability Returns First

Zillow expects affordability to improve broadly, but not evenly.

Some metros are already close to affordable and are projected to cross the 30% threshold by the end of 2026. For example:

• Chicago: 30.4% now → 29.7% projected
  
• Atlanta: 30.6% now → 29.9% projected
  
• Raleigh: 30.4% now → 29.6% projected
  
• Dallas: 31.3% now → 30.1% projected
  

Meanwhile, expensive coastal markets remain far from affordable, even with improvement:

• Los Angeles: 67.3% now → 65.4% projected
  
• New York: 55.4% now → 53.9% projected
  
• San Diego: 57.6% now → 56.2% projected
  

So yes, home buying is becoming more affordable. But the affordability comeback is most realistic in the metros where the affordability gap is small enough for modest income growth and rate easing to make a difference.

The Down Payment Problem is the Quiet Limiter

There’s one constraint Zillow highlights that can’t be glossed over: the down payment.

This entire affordability forecast assumes buyers put 20% down, which Zillow itself calls a “tall hurdle.” Zillow’s Home Value Index puts the typical home at $359,078, meaning a 20% down payment is nearly $71,800 today. Under Zillow’s appreciation forecast, that would exceed $73,000 by the end of 2026. 

And Zillow notes the obvious follow-on: smaller down payments increase monthly costs and reduce affordability. So while the affordability trend is improving, many real households may not experience it unless they can clear the upfront cash barrier.

So, is Home Buying Becoming More Affordable?

Yes, by Zillow’s own definition and projections, home buying is becoming more affordable, and in more large metros than we’ve seen since 2022. Zillow forecasts 20 of the 50 largest metros will be affordable to buy in by the end of 2026, supported by falling mortgage rates, rising incomes, and subdued home value growth, not by a crash.

But the most accurate takeaway is this:

Affordability is healing, not resetting.

The market isn’t rewinding to 2019. Instead, it’s slowly rebuilding balance after a historic payment shock. And for buyers who have been waiting for any sign that the math is improving, Zillow’s forecast points in one direction.

The squeeze is easing.

One Solution

If you’re stuck in a high-mortgage situation and facing foreclosure or other financial issues, one potential solution is to sell to a cash buyer. In a slow market, selling fast can mean moving on and buying a house in a more affordable environment. See how we can buy your house fast.