Zillow Shows $30,000 Boost in Buying Power as Rates Fall to 6.1%
A median-income U.S. household’s buying power has jumped by $30,302 year-over-year to $331,483, the highest since March 2022, thanks to mortgage rates falling to 6.1% from 6.96% and an 8.4% drop in typical payments. That improvement brings roughly 82,300 more homes within reach and inventory is up 6%.
1. Buying Power Surges to Highest Level Since 2022
Median-income households can now afford a $331,483 home with a 20% down payment, marking a $30,302 increase over the past year and the strongest purchasing capacity since March 2022. This gain unlocks access to roughly 447,000 listings, up from 364,688 a year earlier.
2. Mortgage Rate Declines Drive Affordability
Average mortgage rates have eased from 6.96% in January 2025 to 6.1% last month, reducing typical monthly payments by 8.4%. Continued rate declines forecasted through 2026 could further expand homebuyer budgets.
3. Metro Areas Lead with Significant Gains
High-cost markets see the largest boosts: San Jose buyers gained nearly $74,000 in buying power, San Francisco $56,115, and Washington, D.C. $48,881. Overall U.S. listings within reach rose 6%, reflecting both lower rates and a 6% rise in available inventory.
4. Implications for Zillow’s Platform
As more households qualify for a broader range of homes, search traffic and listing engagement on Zillow are likely to increase, potentially driving higher advertising and partner referral revenues in upcoming quarters.