Slower home price growth, lower mortgage rates and rising incomes will make regular mortgage payments more affordable in 20 of the nation’s 50 largest metropolitan areas this year, the highest level since 2022.
After years of feeling penny-pinching, U.S. homeowners expect to see some welcome gains in affordability in 2026.
Slower home price growth, lower mortgage rates and rising incomes will make regular mortgage payments more affordable this year in 20 of the nation’s 50 largest metro areas (the most major metro areas after 2022), according to Zillow.
For this analysis, Zillow defined “affordability” as the typical home mortgage payment that is 30% or less of median household income.
Home ownership costs have skyrocketed in the years since the COVID-19 pandemic. In the five years before the pandemic, mortgage payments for a typical home accounted for 22.5 to 26.5 percent of median household income (including a 20 percent down payment).
But by October 2023, regular mortgage payments will require 38.2 percent of median household income, the lowest ever affordability. At the time, seven of the 50 largest subway lines in the United States were affordable.
Nationally, mortgage payments now account for 32.6% of median household income, the most affordable level since August 2022, Zillow reported. By the end of 2026, this number should reach 31.8 percent.
“This looks like a year of small gains for the housing industry,” Kara Ng, senior economist at Zillow, said in the company’s report. “Increasing incomes, lower inflation, and gradual easing of mortgage rates will help buyers regain their footing while homeowners continue to build wealth. This slow and steady affordability improvement is what the housing market needs over the long term.”
Chicago, Illinois. Atlanta, Georgia. and Raleigh, North Carolina. All of these are expected to join the list of affordable large metros this year. Affordability is also expected to improve in all major markets except Hartford, Conn., which the portal recently named the hottest market for 2026.
For mortgage payments to reach Zillow’s projected 31.8% of median household income, mortgage rates would need to fall nearly 6% (as expected, although rates are volatile), home prices would need to rise 1.9%, and income would need to increase 3.3% (current Bloomberg consensus estimates).
Additionally, this predictive model assumes that borrowers will make a 20% down payment, which can be a burden for many homebuyers given that the typical home in the United States is appraised at $359,078, which would result in a 20% down payment of $71,800.
Assuming a 20% down payment and using average mortgage rates of 6.2% since December, the monthly cost of a typical American home today is $2,337, including taxes, insurance, principal and interest, according to Zillow. This amount is down $92 per month compared to the same period last year and $177 from the October 2023 high. By December 2026, your standard monthly payment should reach $2,358.
20 Great Affordable Subways in 2026:
Chicago, Illinois Houston, Texas Atlanta, Georgia Detroit, Michigan Minneapolis, Minnesota Baltimore, Maryland St. Louis, Missouri San Antonio, Texas Pittsburgh, Pennsylvania Cincinnati, Ohio Kansas City, Missouri Columbus, Ohio Indianapolis, Indiana Cleveland, Ohio Oklahoma City, Oklahoma Raleigh, North Carolina Memphis, Tennessee Louisville, Kentucky Buffalo, New York Birmingham, Alabama
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