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'The difference between settling and choosing': Buying power rises $30,000 on the back of lower mortgage rates, higher incomes

Improving affordability suggests this spring's home shopping season will see more activity

  • A Zillow analysis shows a median-income U.S. household can now afford a $331,483 home. That is a $30,302 increase in buying power since last year and the highest affordable price since March 2022.
  • A median-income household has seen roughly 82,300 more homes come within their budget than a year ago, according to Zillow's analysis.
  • Zillow forecasts further dips in mortgage rates this year, which would lead to additional improvements in buying power.

SEATTLE , Feb. 23, 2026 /PRNewswire/ -- The housing market has yet to fully emerge from its winter hibernation, but improving affordability points to a more active home shopping season this spring. A median-income U.S. household can now comfortably afford a $331,483 home with a 20% down payment. That's $30,000 more than a year ago, according to a new Zillow® analysis, thanks to rising incomes and lower mortgage rates.

The typical mortgage payment — excluding taxes and insurance, and assuming a 20% down payment — is 8.4% lower than a year ago. Home value growth has flattened, and mortgage rates have fallen from an average of 6.96% in January 2025 to 6.1% last month, while incomes have edged higher. Together, those factors have given a median-income household an extra $30,302 in buying power.

Buying power is now at its highest level since March 2022, when mortgage rates were still below 5%. The recent low point was in October 2023 at $272,224. Mortgage rates averaged 7.62% that month, the highest average in any month since 2000. Zillow expects rates to fall further through 2026, which would unlock additional buying power for home shoppers.

"A more than $30,000 gain in buying power is meaningful for households that have been stretched thin by high rates. It can mean the difference between settling and choosing," said Kara Ng, senior economist at Zillow. "That doesn't suddenly make this market affordable for everyone, but it does crack open doors that had firmly shut when rates peaked."

The dip in mortgage rates brings the biggest boosts to buying power in expensive markets. In San Jose, a median-income household has gained nearly $74,000 in buying power compared to a year ago, the largest increase among major metro areas. San Francisco buyers have seen a $56,115 boost, followed by Washington, D.C. ($48,881), San Diego ($46,506) and Boston ($46,390).

In practical terms, a median-income household can now afford roughly 82,300 more homes for sale than it could a year ago. In addition to improved affordability, that also reflects the continued inventory recovery, with 6% more homes on the market in January than a year earlier. The nearly 447,000 homes a median-income household could afford today represent 40.3% of listings — up from 34.8% a year ago.

In markets where home values have fallen, buyers' dollars stretch even further in real terms with today's lower mortgage rates. Houston leads the nation in affordable inventory growth, with just under 4,000 more listings within reach for a median-income buyer compared to a year ago. Phoenix follows with 3,434 additional affordable homes, ahead of Dallas (3,267), Miami (2,981) and Atlanta (2,279). Home values have fallen since last year in each of those markets.

For shoppers tracking how much home they can afford, Zillow Home Loans' BuyAbility℠ tool provides a personalized estimate based on income, credit profile and current mortgage rates.

Metro Area*

January 2026:
Affordable Home
Price**

January 2025:
Affordable Home
Price**

January 2026:
Affordable Homes
for Sale

January 2025:
Affordable Homes
for Sale

United States

$331,483

$301,181

446,982

364,688

New York, NY

$381,237

$346,450

5,831

4,718

Los Angeles, CA

$421,030

$379,754

1,107

447

Chicago, IL

$299,770

$274,738

7,385

6,807

Dallas, TX

$347,681

$319,291

10,979

7,712

Houston, TX

$298,282

$274,173

12,176

8,180

Washington, DC

$519,441

$470,560

6,000

4,028

Philadelphia, PA

$346,797

$315,469

6,112

5,400

Miami, FL

$300,704

$276,987

15,903

12,922

Atlanta, GA

$362,571

$330,769

12,551

10,272

Boston, MA

$488,388

$441,998

1,296

857

Phoenix, AZ

$403,247

$363,929

7,951

4,517

San Francisco, CA

$581,564

$525,449

1,119

927

Riverside, CA

$383,591

$347,348

2,365

1,579

Detroit, MI

$295,016

$268,220

7,472

6,202

Seattle, WA

$474,197

$428,713

1,551

1,057

Minneapolis, MN

$376,963

$343,188

3,994

3,166

San Diego, CA

$477,571

$431,066

675

339

Tampa, FL

$300,751

$276,525

7,012

5,298

Denver, CO

$456,008

$413,858

3,458

2,284

Baltimore, MD

$397,748

$360,892

3,856

3,055

St. Louis, MO

$323,200

$293,885

4,157

3,691

Orlando, FL

$317,511

$290,729

4,503

3,435

Charlotte, NC

$368,639

$333,655

4,134

3,069

San Antonio, TX

$306,964

$280,783

5,939

4,266

Portland, OR

$409,554

$371,095

1,585

1,003

Sacramento, CA

$414,910

$375,909

766

487

Pittsburgh, PA

$290,949

$265,388

3,798

3,482

Cincinnati, OH

$337,330

$305,421

2,985

2,590

Austin, TX

$400,113

$365,254

4,176

2,637

Las Vegas, NV

$354,612

$319,946

3,174

1,958

Kansas City, MO

$341,641

$309,997

3,254

2,651

Columbus, OH

$320,891

$292,086

2,137

1,806

Indianapolis, IN

$318,055

$288,936

3,626

2,835

Cleveland, OH

$256,197

$233,539

2,468

2,229

San Jose, CA

$741,686

$667,829

309

185

Nashville, TN

$386,511

$349,332

2,417

1,535

Virginia Beach, VA

$326,882

$297,057

2,336

1,935

Providence, RI

$331,074

$300,051

264

223

Jacksonville, FL

$360,891

$327,689

4,732

4,174

Milwaukee, WI

$317,719

$287,377

1,292

1,150

Oklahoma City, OK

$264,580

$242,926

2,679

2,064

Raleigh, NC

$425,344

$385,921

2,052

1,278

Memphis, TN

$251,449

$230,433

2,322

1,776

Richmond, VA

$344,191

$311,553

904

751

Louisville, KY

$300,159

$272,361

2,253

1,564

New Orleans, LA

$203,102

$188,386

1,335

927

Salt Lake City, UT

$444,089

$399,999

970

531

Hartford, CT

$343,486

$313,010

573

546

Buffalo, NY

$310,106

$279,742

932

756

Birmingham, AL

$312,379

$283,544

2,840

2,262

*

Table ordered by market size 

**

For a median-income household to spend no more than 30% of income on the monthly mortgage payment, excluding taxes and insurance, and assuming a 20% down payment

About Zillow Group
 Zillow Group, Inc. (Nasdaq: Z and ZG) is reimagining real estate to make home a reality for more and more people.

As the most visited real estate app and website in the United States, Zillow connects hundreds of millions of consumers with innovative technology, trusted agents and loan officers, and seamless digital solutions. With industry-leading tools and resources, Zillow supercharges real estate professionals so they can grow their businesses and deliver exceptional client experiences. For renters and housing providers, Zillow offers not only a robust marketplace but a set of end-to-end products and services to streamline applications, leases, payments and more.

Zillow's ecosystem spans the entire home journey — from dreaming and shopping to renting, buying, selling and financing.

Zillow Group's affiliates, subsidiaries and brands include Zillow®, Zillow Premier Agent®, Zillow Home Loans®, Zillow Rentals®, Zillow®New Construction, Trulia®, StreetEasy®, Out East®, HotPads®, Follow Up Boss®, ShowingTime®, dotloop® and Zillow® Closing.

All marks herein are owned by MFTB Holdco, Inc., a Zillow affiliate. Zillow Home Loans, LLC is an Equal Housing Lender, NMLS #10287 (www.nmlsconsumeraccess.org). © 2026 MFTB Holdco, Inc., a Zillow affiliate.

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SOURCE Zillow