Housing Affordability Stabilizes for the First Time in Three Years

Affordability is improving across the housing market. According to a recent report from real estate marketing platform Zillow, the share of renters in their prime homebuying years who could afford to own a home stopped declining for the first time in three years. In 2022, the share of renters who were homeownership-ready sat at 34%, and by 2024, that share fell to 20.4% where it remains.

For the analysis, Zillow looked at renters between the ages of 29 to 43. Those considered homeownership-ready could reasonably afford a monthly mortgage payment for a typical home in their local metro area.

Improved affordability isn’t necessarily increasing home sales

Although affordability has improved, home sales remain weak. The report suggests this could be due to low housing inventory, limited savings for a down payment, and economic uncertainty, among other barriers.

Homebuying potential is better in some regions of the U.S. than in others

Among the 50 largest metros in the U.S., those in the South and Midwest are home to the highest shares of homeownership-ready renters. With a share of 33.8%, Pittsburgh leads the way; followed by Cleveland at 27.1%; Buffalo, N.Y., at 26.3%; Birmingham, Ala., at 25.9%; Detroit at 24.9%; and then Chicago at 24.1%.