Housing Affordability Trends in the U.S. - Q1 2026 Review
Housing affordability in the U.S. remained below historical standards in most county-level markets during the first quarter, though slight improvements were noted compared to both the previous quarter and the same period last year. This is according to a report released by real estate market analytics firm Attom.
To afford a median-priced home in the U.S. within the recommended 28% of wages, with a 20% downpayment, a buyer in the first quarter of 2026 would need to earn approximately $84,230 annually. This marks a decrease from the $86,611 required the previous year, reflecting enhanced affordability.
The report links this gradual improvement to wage growth that has surpassed home-price increases in approximately two-thirds of U.S. counties over the past year. This represents a shift from the trend since 2011, where home-price gains often outpaced median wage growth. According to Attom, the national median home price rose from $351,000 in early 2025 to $360,000 by the first quarter, an increase of about 2.56%. In contrast, since early 2024, the median home price has increased by 8%, compared to a 6.4% rise in average weekly wages.
Earlier double-digit home price increases during the COVID-19 pandemic expanded the gap between home prices and wages. Attom's report highlights a decline in average mortgage rates for 30-year fixed-rate loans from around 7% at the beginning of 2025 to the high-5% range by February, supporting affordability improvements. However, recent geopolitical events have pushed mortgage rates above 6.4%, impacting these gains.
"Mortgage rates dropped throughout last year, which offset some of that growing affordability gap, but shifts in the broader economic environment can still influence rates and home purchasing power," stated Rob Barber, CEO of Attom.
Some populous counties, including Los Angeles County, California; Cook County, Illinois; Harris County, Texas; Maricopa County, Arizona; and San Diego County, California, saw wage growth outpace home price increases over the past year. Despite these improvements, Attom reported that the costs of median-priced single-family homes and condos surpassed historical norms in 560 out of 580 counties during the first quarter, making up about 97% of the analyzed markets.
Typical monthly expenses for mortgage payments, homeowners insurance, mortgage insurance, and property taxes on a median-priced home accounted for 30.3% of an average worker's wages in the first quarter, a slight reduction from 30.6% the previous quarter and 31.6% during the same period in 2025. In about 25% of analyzed counties, home purchase expenses exceeded 43% of resident income, down from nearly 30% the previous quarter. Among the 25 counties with the highest wage share required for typical monthly expenses, California had 14 counties, New York had four, New Jersey had three, and Hawaii had two.