Buying a home got just a little bit more affordable last month.
The amount of money Americans need to earn to afford a typical house for sale in the U.S. in April fell 2% from the same month a year earlier, to $116,780 from $119,191, according to the online real estate brokerage Redfin.
It was the seventh straight month of year-over-year improvement in affordability, the analysis found, with the income threshold dropping in 35 of the 50 most populous metropolitan areas in the United States, a list that does not include any place in Utah.
Last year, the earnings required to afford a house hit a record $122,000. The company’s calculations consider a home affordable if a monthly mortgage payment adds up to no more than 30% of what a buyer makes, assuming a 15% down payment.
Ability to afford a home ‘gradually improving’
“Americans still need a six-figure income to afford a regular home, but it’s encouraging that affordability is gradually improving,” a Redfin economist, Grishma Bhattarai, said. “House hunters who have been waiting on the sidelines may want to start paying close attention.”
Bhattarai said the good news for homebuyers is that nationwide there are “still more homes on the market than there were a year ago, many more sellers than buyers, and more room for buyers to negotiate.”
Still, the typical household income in the U.S. is estimated at less than $88,000, so it takes 40% of those earnings to afford the nearly $400,000 cost of a median price home. And home prices were up 2.4% year over year in April, the biggest year-over-year price hike since March 2025.
Will gains in housing affordability be erased?
Mortgage rates, which had dipped below 6% in late February for the first time since 2022, are also climbing. Last week, uncertainty over the war in Iran helped spark a surge that saw rates tracked daily shoot up to 6.75%.
That rapid rise in mortgage rates is “potentially erasing some of the affordability gains made in April,” Redfin warned, while future improvements may not materialize “if the Iran war continues pushing up oil prices, the Fed hikes interest rates or the economy experiences another shock.”