US Housing Affordability Improved Modestly in 2024 but Remains Out of Reach for Many

On Monday, Redfin reported that, based on its latest data, a household earning the $83,782 median US income in 2024 would need to allocate 41.8% of their income toward monthly housing costs if they bought the median-priced US home, valued at $429,734.

Redfin noted that this is a slight improvement from 42.2% in 2023, but it remains significantly less affordable than the typical 30% or lower seen during the 2010s.

In 2024, a homebuyer would need to earn at least $116,782 annually to spend no more than 30% of their income on monthly housing payments for the median-priced home. This is a record high and $33,000 more than the typical household’s annual income.

In addition, the median monthly housing payment for homebuyers reached a record $2,920 last year, up 4.3% from 2023 and 86% from 2019. In comparison, wages have increased by around 4% year-over-year throughout 2024. The slight improvement in affordability is primarily due to a marginal decrease in the average mortgage rate, which fell to 6.72% from 6.81% in 2023. This marks the fourth consecutive year in which the income needed to keep home payments affordable has surpassed the median household income.

In comments accompanying the report, Redfin Senior Chief Economist Elijah de la Campa said:

“Affordability improved ever so slightly this year because wage growth outpaced the growth in monthly housing payments. But that’s not to say buying a home became affordable. For many Americans, buying a home remains more out of reach than ever and that’s unlikely to change anytime soon. Even with inventory trending upwards, we still expect prices to continue rising in 2025 due to a lack of homes for sale—pushing more would-be homebuyers to rent instead.”