Buying Power Rises $30,302 to $331,483 as Rates Drop to 6.1%
Analysis shows median-income US households can afford a $331,483 home, a $30,302 year-over-year increase and the highest level since March 2022. Falling mortgage rates from 6.96% to 6.1% and a 6% inventory rise have added roughly 82,300 affordable homes nationwide.
1. National Affordability Gains
Median-income U.S. households can now afford a $331,483 home, a $30,302 increase from a year earlier and the highest level since March 2022. This improvement stems from mortgage rates falling from 6.96% to 6.1% and an 8.4% drop in the typical mortgage payment, while listings ticked up 6% year-over-year.
2. Major Metro Increases
San Jose saw the largest gain of nearly $74,000 in buying power, followed by San Francisco with $56,115 and Washington, D.C. with $48,881. Other notable increases occurred in San Diego ($46,506) and Boston ($46,390), widening the pool of affordable listings in these high-cost markets.
3. Inventory Growth in Value-Falling Markets
In markets with lower home values, affordability gains translated into thousands more listings. Houston leads with nearly 4,000 additional affordable homes, followed by Phoenix (+3,434), Dallas (+3,267), Miami (+2,981) and Atlanta (+2,279), reflecting both price declines and lower rates.
4. Outlook and Buyer Tools
Mortgage rates are forecast to drop further through 2026, potentially unlocking additional buying power for home shoppers. A personalized buying-power tool offers estimates based on income, credit profile and current rates, helping buyers gauge affordability in varying markets.