US Homebuying Income Threshold Falls for Seventh Straight Month: Report

Home affordability across America could become a tad more attainable as the household income needed for a typical home declined for the seventh straight month in April, according to a May 26 Redfin report.

In April, households needed to earn $116,780 to buy a typical home—down from $119,191 in April 2025. The homebuying income needed peaked at $122,000 in mid-2025.

Redfin bases its affordability margin on buyers spending no more than 30 percent of their household income on monthly housing payments, including mortgage and property taxes, based on a 15 percent down payment.

The report attributes affordability improvement to decreasing housing costs and increasing incomes. In April, Redfin noted, the average 30-year fixed rate was 6.33 percent, compared with 6.73 percent a year ago. Meanwhile, it lists the estimated median household income at $87,599—a 4 percent year-over-year increase.

However, the nation’s median home price sale saw a 2.4 percent year-over-year increase in April, and the mortgage rates as of May 21 were holding at 6.51 percent, according to Freddie Mac. As a result, the report states, home seekers who lock in a rate now may not find the market to be more affordable than one year ago

“Americans still need a six-figure income to afford a regular home, but it’s encouraging that affordability is gradually improving,” Redfin economist Grishma Bhattarai stated in the report. “House hunters who have been waiting on the sidelines may want to start paying close attention.”

Bhattarai noted that today’s inventory has improved since last year, with many more sellers than buyers, giving potential homeowners more ability to negotiate. However, she cautioned that early May data showing a rise in pending home sales could mean more bidding wars on the way.

In addition, Bhattarai said, the continued conflict with Iran could push oil prices higher and interest rates could possibly follow.

Overall, the Redfin data indicate that 32.9 percent of home listings were affordable to households earning the median income in April, up from 28.7 percent a year earlier. Affordability is also improving in 35 of the 50 most populated metros.

Despite the national trend of declining incomes needed to purchase a home, the $116,780 income needed to buy is still about $29,000 higher than the average U.S. household income of $88,000.

“The typical American homebuyer would need to spend 40 percent of their income to buy the median-priced U.S. home,” Redfin stated in its report.

A same-day report from the Federal Housing Finance Agency (FHFA) indicates that price growth across the country continued to slow in the first quarter, increasing by 1.7 percent year over year. Quarter over quarter, prices increased by 0.5 percent. The FHFA’s seasonally adjusted monthly index for March grew by just 0.1 percent from February.

Nationally, the report indicates, the U.S. housing market has seen positive annual appreciation in each quarter since the beginning of 2012.

Between the first quarter of 2025 and the first quarter of 2026, home prices grew in 42 states, with Illinois realizing the highest annual appreciation, at 7.3 percent. Alaska’s annual appreciation increased by 5.5 percent, Vermont’s by 4.9 percent, and Connecticut’s and Kentucky’s by 4.7 percent.

Eight states saw price declines, with Colorado and the District of Columbia experiencing the most significant decreases, at 2.4 percent.

Sixty-five of the nation’s top 100 metropolitan areas also recorded price increases, with Elgin, Illinois, leading the way at 10.8 percent.