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Starter-home affordability improves as required income edges down

Redfin said the income needed to buy a typical starter home fell 1.5% from a year ago to $70,693, as prices cooled but mortgage rates rose in 2026.

Reported · Written up by our desk · Residential

First-time buyers saw a modest improvement in starter-home affordability, with Redfin estimating that Americans need to earn $70,693 to afford the typical U.S. starter home, down 1.5% from a year ago.

Redfin attributed the year-over-year declines largely to easing price growth, while noting that mortgage rates have risen throughout 2026, pushing up monthly housing costs. The data are based on a Redfin analysis of median home sale prices, prevailing mortgage rates and property-tax payments, using a 15% down payment, and the report focuses on June 2026.

Affordability is improving faster for entry-level homes than for the overall market. Redfin estimated that the income needed to buy the typical U.S. home for sale fell 0.5% from a year ago to $109,796, even as the median price for starter homes rose 1.2% year over year in June versus a 2.2% increase for all homes.

Redfin said starter homes remain difficult to buy, with sale prices near record highs and mortgage rates elevated near 7%, and it added that the strain is increasing further as rates reached their highest level in a year at the end of July. It also reported that the typical U.S. household earns $87,599, about $17,000 more than what is needed to buy the median-priced starter home, and that this gap has widened versus a year ago.

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