Housing Affordability in 2024: Slight Progress, But Still Out of Reach for Most

Although housing affordability improved slightly in 2024, buying and maintaining a home remained financially unrealistic for many Americans. This mild shift was due in part to continued wage growth—up 4%—and a slower rise in housing-related expenses, thanks to a slight decline in mortgage rates and increased inventory.

Still, the numbers tell a difficult story. A household earning the U.S. median income of $83,782 would have needed to spend 41.8% of its monthly income to cover the costs of a median-priced home, according to a recent analysis by Redfin. That’s well above the commonly accepted affordability benchmark of 30%.

While this marks a small improvement from 2023—when that figure reached a record 42.2%—the housing market remained out of reach for the average buyer. In fact, to stay within that 30% affordability threshold in 2024, a household would have needed to earn at least $116,782 per year.

Redfin’s Chief Economist, Daryl Fairweather, attributed the modest improvement in affordability to an increase in housing supply, which helped ease pressure on prices. However, she emphasized that homeownership remained largely inaccessible for many. Increasingly, buyers able to compete in today’s market are paying in cash, suggesting that homeownership is skewing toward wealthier individuals. Meanwhile, those on the edge of affording a home are continuing to rent.

Affordability also varied widely by region. Among the major metro areas studied, Pittsburgh (25.3%), Detroit (25.5%), and St. Louis (26%) were the most affordable. In contrast, areas like Los Angeles (77.6%), San Francisco (76.2%), and Anaheim (75.9%) required more than three-quarters of a household’s income to cover housing costs.

Fairweather noted that while Sun Belt cities remain popular, many buyers are turning to Rust Belt metros because of lower overall costs, including insurance and property taxes.

Redfin found that affordability improved in exactly half of the 50 largest U.S. metros analyzed.

Despite these incremental gains, total housing expenses continued to climb. The typical monthly payment for homebuyers in 2024 hit a record $2,920, representing a 4.3% increase from 2023 and an 86% increase from 2019.

Beyond mortgage rates, other homeownership costs such as property taxes, utilities, and insurance also continued to rise. HOA fees are climbing too—Redfin reported a 5.7% annual increase in median monthly HOA dues across 43 major markets. This means even buyers who locked in low mortgage rates during the pandemic are now facing steadily rising costs.

Fairweather added that rising home values are pushing up tax assessments in many areas. Meanwhile, maintenance costs have grown since the pandemic, placing additional financial pressure on homeowners.

Looking ahead, affordability challenges are expected to persist into 2025. While Redfin projects a 4% increase in home prices this year, some segments of the market may shift. For example, older condos—particularly in Florida—are facing higher fees and assessments, which is softening demand and may slow price growth in that category.

In short, while 2024 brought slight relief, most households are still priced out of homeownership—and the broader economic pressures show no signs of letting up.