Housing affordability remains a persistent challenge for prospective homebuyers across the United States, as the income required to purchase a typical home stays near historic highs — well above what most American households earn. Still, recent data from Redfin suggests modest improvement compared with a year ago.

Home prices surged during 2022 and 2023, fueled by strong post-pandemic demand, while mortgage rates roughly doubled as the Federal Reserve raised interest rates to combat inflation. A chronic nationwide shortage of available homes for sale has kept upward pressure on prices even as borrowing costs have moderated, limiting the extent to which affordability can improve.

According to a new report by Redfin, the income needed to afford the typical U.S. home on the market stood at $109,796 as of June — down 0.5% from the all-time high of $110,382 reached last year.

A year ago, the typical American household earned $26,125 less than what was needed to afford a median-priced home. Two years ago, that gap was even wider at $28,834. Redfin attributed the narrowing gap to income growth outpacing the rise in housing costs over the past few years.

Although the income required to afford a home has been trending downward since October 2025, the declines have been relatively modest. The threshold remains $22,197 above the typical household income of $87,599.

Year over year, the median home sale price rose 2.2% in June, while mortgage rates eased slightly into the mid-6% range. Over the same period, the median household income increased by 4%.

"The earnings needed to buy a house have stabilized after several years of deterioration, but that doesn't mean homes are affordable to the average American," said Redfin senior economist Yingqi Xu. "There's still a double-digit gap between what the typical household earns and what they need to comfortably buy a home, leaving many prospective first-time buyers stalled on the sidelines. But even if the market isn't becoming much more affordable, it is becoming a bit more manageable for house hunters."

Redfin defines an affordable listing as one where a buyer's monthly mortgage payment does not exceed 30% of their income. By that measure, the share of affordable listings on the market rose from 31% a year ago to 34% in June.

Even so, the report notes that affordable listings remain far scarcer than in the past. Prior to the 2022 spike in mortgage rates, more than half of all U.S. home listings were affordable to the typical American household in nearly every month on records dating back to 2013.

Redfin's analysis covered 46 metropolitan areas and found improving affordability in 24 of them. Seattle posted the largest improvement, with the income needed to afford the median-priced home falling 7.4% year over year to $221,831. San Jose recorded the second-largest decline at 6.5%, dropping to $423,840, followed by Portland in third with a 4.5% decline to $153,844.

Despite those gains, affordability remains out of reach for many local residents. In San Jose, the median household income of $176,401 is still roughly $250,000 below what is needed to purchase the typical home in the area.

Only three metro areas in the analysis had typical household incomes exceeding the amount required to afford a median-priced home: St. Louis, Indianapolis, and Pittsburgh. The divergence between high-cost coastal markets and more affordable Midwest metros underscores how unevenly the affordability crisis plays out across the country, with different regions facing distinct combinations of price levels, income growth, and local supply conditions.