Zillow: 20 Major Metros to See Homes Reach ‘Affordable’ Status by December

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Zillow, Seattle, projected that the mortgage payment for a typical home should be affordable in 20 of the nation’s 50 largest metros by December, the longest that list has looked since 2022.

New cities that will be added to the “affordable” list are Chicago, Atlanta and Raleigh, N.C. Affordability is expected to improve in every major market except Hartford, Conn., through 2026.

The firm defines affordability as a mortgage payment on a typical house that doesn’t require more than 30% of the median household income. In the five years leading up to the COVID-19 pandemic, mortgage payments (including taxes, insurance and maintenance and assuming a 20% down payment) on a typical U.S. home required between 22.5% and 26.5% of median household income.

At a national level, a mortgage payment now takes 32.6% of median household income, and that’s on track to improve further to 31.8% by the end of the year. At its all-time high, a typical mortgage payment consumed 38.2% of median household income in 2023.

Monthly mortgage costs have fallen $92 year-over-year and $177 from the peak hit in October 2023.

“This is what a small-wins year looks like for housing,” said Zillow Senior Economist Kara Ng. “Rising incomes, subdued price growth and gradually easing mortgage rates would help buyers regain their footing while allowing homeowners to continue building wealth. These types of slow and steady affordability improvements are exactly what the housing market needs over the long-run.”