Americans have to make at least $111,252 per annum to afford a typical home for sale in the country—a 4 percent decline from a year ago, real estate brokerage Redfin said in a Feb. 11 statement.

“The income needed to buy a home has been declining since November, providing some much-needed relief for U.S. homebuyers. Before that, the income needed to afford a home had been rising on a year-over-year basis nearly every month for five years straight, since the pandemic homebuying boom drove up home-sale prices,” the company said.

The $111,252 per annum income requirement is down from the peak of $122,000 hit in June, according to the brokerage.

“While housing remains historically expensive, the trajectory is finally starting to reverse, with the door to buying a home opening a bit wider rather than closing tighter,” Chen Zhao, Redfin’s head of economics research, said. “But while affordability is improving, Americans are contending with other obstacles on the road to buying a home, like nerves about layoffs and economic uncertainty.”

Redfin attributed the improvement in nationwide housing affordability to stable sales prices and falling mortgage rates. The median price of a home for sale is $426,747, “just slightly higher than last year.”

The average weekly rate on a 30-year fixed-rate mortgage was 6.09 percent for the week ending Feb. 12, down from 6.87 percent a year back, according to data from Freddie Mac.

Rates had remained higher than 6.5 percent for every week since October 2024, a pattern that only broke in September last year, following which rates have remained below the level.

Sam Khater, Freddie Mac’s chief economist, said in a Feb. 12 statement that housing affordability continues to “measurably improve” due to mortgage rates at three-year lows, a solid labor market, and strong economic growth.

These factors have encouraged homebuyers, driving up mortgage purchase application activity compared to a year back, Khater said.

According to Redfin, the dip in housing costs has pushed down the median monthly mortgage payment from $2,800 a year back to $2,675 at present.

Homebuying affordability has improved in 37 out of 50 most populous metro areas assessed, the brokerage said. Dallas has seen the highest improvement in affordability, followed by Sacramento, California, and Jacksonville, Florida.

Improving Housing Affordability

Over nine in 10 Americans now see housing affordability as a problem, according to a Feb. 2 report from real estate company Bright MLS.

The company surveyed more than 3,000 Americans, and found that high mortgage rates and low personal incomes were cited as the main reasons housing affordability has become a concern.

Many Americans saw a lack of housing supply as a “key constraint” to affordability, with 43.2 percent of respondents saying that “not enough housing is being built at lower price points,” the report said.

In a Jan. 22 statement, the National Association of Home Builders said that it had urged Congress to ease regulatory burdens to improve housing affordability.

Buddy Hughes, chairman of NAHB, told a Congressional hearing that excessive regulations were hindering the construction of new homes and apartments, according to the statement.

“Regulations account for nearly 25 percent of the cost of a single-family home and more than 40 percent of the cost of a typical apartment development,” Hughes said.

“The time and costs associated with complying with a multitude of government regulations can be significant for small- and medium-sized builders and ultimately limit housing supply.”

Meanwhile, the Trump administration has taken steps to ease the housing affordability situation.

Last month, President Donald Trump signed an executive order to restrict Wall Street companies from buying single-family homes in the country.

“Hard-working young families cannot effectively compete for starter homes with Wall Street firms and their vast resources,” Trump wrote in the order. “Neighborhoods and communities once controlled by middle-class American families are now run by faraway corporate interests.”

In December, Trump said during a televised address that he planned to announce “some of the most aggressive housing reform plans in American history.”

The president said he would declare a new Federal Reserve chairman who would be supportive of lowering the central bank’s benchmark interest rates. Declining interest rates under the new central bank leadership would lead to a fall in mortgage rates.

On Jan. 30, the president announced that former Federal Reserve Governor Kevin Warsh will succeed Jerome Powell as the next central bank head.

Warsh “certainly wants to cut rates. I’ve been watching him for a long time,” Trump told reporters. Powell’s term expires in May.