Housing Affordability in 2024: A Slight Improvement After Four Years of Decline
For the first time in four years, housing affordability in the U.S. did not worsen. A prospective homebuyer needed an annual income of at least $116,782 in 2024 to keep monthly housing payments for a median-priced home within 30% of their earnings.
A household earning the median U.S. income of $83,782 in 2024 would have had to allocate 41.8% of their income to housing payments for a $429,734 median-priced home. While this is a slight improvement from 42.2% in 2023, it remains significantly higher than the 30% threshold considered affordable during the 2010s.
According to Redfin’s latest report, this modest improvement can be attributed to wage growth slightly outpacing the increase in monthly housing costs. However, the broader picture remains challenging for many Americans. “Affordability improved marginally this year because wage growth outpaced the rise in housing payments,” said Redfin Senior Economist Elijah de la Campa. “But buying a home is still out of reach for many. Limited inventory is likely to keep pushing prices upward in 2025, forcing more people to continue renting.”
The Cost of Homeownership Continues to Rise
In 2024, an income of $116,782 was required to purchase a median-priced home without exceeding 30% of earnings on housing costs. This is the highest on record and surpasses the typical annual household income by $33,000.
Monthly housing payments reached a record high of $2,920 in 2024, a 4.3% increase from 2023 and an 86% jump from 2019. While wages grew by approximately 4% annually, the slight improvement in affordability was mainly driven by a marginally lower average mortgage rate of 6.72% compared to 6.81% in 2023. Nevertheless, 2024 marked the fourth consecutive year where the income needed to afford a home exceeded the median household income.
Texas Metros Lead in Improved Affordability; Anaheim and Chicago See Declines
Austin, TX, saw the largest improvement in affordability among the 50 largest U.S. metropolitan areas. A household earning the city’s 2024 median income of $103,717 would have spent 39.6% of their earnings on housing payments for a $444,928 median-priced home—down from 42.8% in 2023. Housing construction boomed in Texas during the pandemic, boosting inventory and easing prices.
Other metros with notable affordability improvements included:
San Antonio: -2.3 percentage points to 35.4% of household income
Dallas: -2 points to 38.9%
Fort Worth, TX: -1.6 points to 36.7%
Portland, OR: -1.4 points to 45%
Conversely, Anaheim, CA, experienced the steepest decline in affordability. A household earning the metro’s median income of $121,925 would have needed to spend 75.9% of their income on housing payments for a $1,165,965 median-priced home, up from 71.8% in 2023. Other metros with worsening affordability included:
Chicago: +2 points to 34.7%
Miami: +1.7 points to 63.1%
Newark, NJ: +1.6 points to 48.8%
San Jose, CA: +1.5 points to 73.9%
The primary driver of declining affordability in these areas was soaring home prices. Anaheim saw a 12.4% increase in home prices, the highest among major metros, followed by gains in Newark (11.3%), Chicago (8.6%), and Miami (7.9%).
Least and Most Affordable U.S. Metros
California continues to dominate the list of least affordable metros. In Los Angeles, a household earning the median income in 2024 would have spent 77.6% of their income on housing costs for a median-priced home. Other California metros on the list include:
San Francisco: 76.2%
Anaheim: 75.9%
San Jose: 73.9%
San Diego: 67.3%
Outside California, New York City ranks as the least affordable, with 65.9% of median income required for housing payments.
In contrast, Rust Belt metros remain among the most affordable. Pittsburgh leads the way, where a household earning the median income would have spent just 25.3% on housing costs. Other affordable metros include:
Detroit: 25.5%
St. Louis: 26%
Cleveland: 26.4%
Warren, MI: 28%
In these areas, median home prices remain under $300,000, offering a more attainable path to homeownership.
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