Executive Summary
Mortgage affordability reached a 40-year low in 2023 and has improved only modestly since: in 2026, a buyer in the median U.S. metro needs an annual household income of $98,400 to comfortably afford the median-priced home at a 20% down payment and a 7.0% 30-year fixed rate. In the least affordable metros — San Jose, San Francisco, and Los Angeles — required qualifying incomes exceed $250,000, placing homeownership beyond reach for over 80% of local households. In the most affordable metros — Pittsburgh, Cleveland, and St. Louis — required incomes fall below $55,000, and housing costs consume less than 25% of median household income.
This analysis draws on HUD Area Median Income data (2026), Freddie Mac Primary Mortgage Market Survey (PMMS) rates, and metro-level median price data from the National Association of Realtors (NAR) Q1 2026 report to produce a standardized affordability index across 25 major U.S. metros.
The Affordability Framework
Mortgage affordability is most usefully measured through the lens of the standard 28% front-end DTI rule: lenders typically require that monthly housing costs (principal, interest, taxes, and insurance — PITI) not exceed 28% of gross monthly income. This study calculates the minimum gross annual income required to qualify for the median-priced home in each metro at current rates, assuming:
- 20% down payment (conventional conforming loan)
- 30-year fixed rate of 7.0% (Freddie Mac PMMS national average, April 2026)
- Property taxes and insurance at 1.5% of home value annually (added to PITI)
- No other debt obligations (best-case DTI scenario)
The Freddie Mac affordability research team notes that rising rates have extended the income-to-qualify threshold more severely than rising prices in most markets, because rate changes affect the entire loan balance whereas price changes only affect the marginal unit transacted. A 1% increase in mortgage rate on a $400,000 loan raises the monthly payment by approximately $260 — roughly equivalent to a $40,000 increase in home price at the prior rate.
25-Metro Affordability Table: 2026
The table below presents the full affordability picture for 25 major U.S. metros. The Affordability Ratio compares the required qualifying income to the local Area Median Income (AMI) as defined by HUD. A ratio above 1.0 means the median home is unaffordable to the median household; a ratio below 0.8 signals meaningful affordability headroom.
| Metro | Median Home Price | Down Payment (20%) | Monthly PITI | Required Income | HUD AMI | Affordability Ratio |
|---|---|---|---|---|---|---|
| San Jose, CA | $1,680,000 | $336,000 | $10,940 | $468,000 | $180,400 | 2.59 |
| San Francisco, CA | $1,420,000 | $284,000 | $9,240 | $395,400 | $168,600 | 2.35 |
| Los Angeles, CA | $940,000 | $188,000 | $6,110 | $261,900 | $103,200 | 2.54 |
| San Diego, CA | $890,000 | $178,000 | $5,790 | $248,100 | $112,900 | 2.20 |
| Seattle, WA | $780,000 | $156,000 | $5,070 | $217,200 | $132,900 | 1.63 |
| Denver, CO | $620,000 | $124,000 | $4,030 | $172,800 | $112,200 | 1.54 |
| Miami, FL | $620,000 | $124,000 | $4,030 | $172,800 | $78,900 | 2.19 |
| New York, NY | $750,000 | $150,000 | $4,880 | $209,100 | $131,100 | 1.60 |
| Boston, MA | $720,000 | $144,000 | $4,680 | $200,700 | $138,200 | 1.45 |
| Washington, DC | $610,000 | $122,000 | $3,970 | $170,100 | $142,300 | 1.20 |
| Austin, TX | $520,000 | $104,000 | $3,380 | $144,900 | $112,800 | 1.28 |
| Phoenix, AZ | $450,000 | $90,000 | $2,930 | $125,700 | $92,400 | 1.36 |
| Atlanta, GA | $410,000 | $82,000 | $2,670 | $114,300 | $96,200 | 1.19 |
| Charlotte, NC | $390,000 | $78,000 | $2,540 | $108,600 | $92,100 | 1.18 |
| Orlando, FL | $380,000 | $76,000 | $2,470 | $105,900 | $78,200 | 1.35 |
| Tampa, FL | $370,000 | $74,000 | $2,410 | $103,200 | $82,400 | 1.25 |
| Nashville, TN | $460,000 | $92,000 | $2,990 | $128,100 | $98,800 | 1.30 |
| Raleigh, NC | $420,000 | $84,000 | $2,730 | $117,000 | $102,400 | 1.14 |
| Houston, TX | $320,000 | $64,000 | $2,080 | $89,100 | $84,700 | 1.05 |
| San Antonio, TX | $290,000 | $58,000 | $1,890 | $81,000 | $76,400 | 1.06 |
| Jacksonville, FL | $310,000 | $62,000 | $2,020 | $86,400 | $80,100 | 1.08 |
| Kansas City, MO | $280,000 | $56,000 | $1,820 | $78,000 | $89,400 | 0.87 |
| Columbus, OH | $290,000 | $58,000 | $1,890 | $81,000 | $88,700 | 0.91 |
| Cleveland, OH | $210,000 | $42,000 | $1,370 | $58,500 | $74,200 | 0.79 |
| Pittsburgh, PA | $200,000 | $40,000 | $1,300 | $55,800 | $79,600 | 0.70 |
| National Median | $420,000 | $84,000 | $2,730 | $98,400 | — | — |
Source: NAR Q1 2026 Metropolitan Median Price Report; HUD FY2026 Income Limits; Freddie Mac PMMS (April 2026).
The Florida Affordability Paradox
Florida presents a particularly acute affordability challenge because its metros combine rapidly rising home prices with below-average household incomes. Miami (2.19 ratio), Orlando (1.35), and Tampa (1.25) all require incomes significantly above local AMI — meaning the majority of local households cannot afford the median-priced home at current rates. This stands in sharp contrast to Texas metros like Houston (1.05) and San Antonio (1.06), where incomes have kept closer pace with price appreciation.
| Metro | Monthly PITI | Median HH Income | % of Income to Housing | Affordable at 28% Rule? |
|---|---|---|---|---|
| Miami | $4,030 | $65,750/mo equiv. | 42.1% | No — 14.1 pts over threshold |
| Orlando | $2,470 | $6,517/mo equiv. | 37.9% | No — 9.9 pts over threshold |
| Tampa | $2,410 | $6,867/mo equiv. | 35.1% | No — 7.1 pts over threshold |
| Jacksonville | $2,020 | $6,675/mo equiv. | 30.3% | No — 2.3 pts over threshold |
Source: U.S. Census Bureau American Community Survey 2024 5-year estimates; NAR Q1 2026.
Rate Sensitivity: How Much Does a 1% Rate Change Matter?
The Freddie Mac PMMS rate has ranged from 6.1% to 7.8% since 2024. Understanding how rate changes affect affordability helps buyers time their purchase and select the right loan structure. The table below shows monthly payment differences across rate scenarios for four price points common in our coverage markets.
| Home Price | Loan Amount | @ 6.0% | @ 6.5% | @ 7.0% | @ 7.5% | @ 8.0% |
|---|---|---|---|---|---|---|
| $300,000 | $240,000 | $1,439 | $1,517 | $1,597 | $1,678 | $1,761 |
| $400,000 | $320,000 | $1,919 | $2,023 | $2,129 | $2,237 | $2,348 |
| $500,000 | $400,000 | $2,398 | $2,528 | $2,661 | $2,796 | $2,935 |
| $750,000 | $600,000 | $3,597 | $3,792 | $3,992 | $4,194 | $4,402 |
Source: Standard amortization calculation; does not include taxes or insurance.
First-Time Buyer Programs by State
All six states in the Dreamy Leads coverage network offer down payment assistance and first-time buyer programs that can meaningfully change the affordability equation. The most impactful programs reduce the effective down payment to 0–3%, which lowers the required cash at closing but increases the monthly payment. HUD's housing counseling resources are the definitive starting point for buyers exploring assistance programs.
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Methodology
Data sources and collection parameters for this study:
- HUD FY2026 Income Limits: Area Median Income figures for all metros, released March 2026. Used as the denominator for all affordability ratio calculations.
- Freddie Mac PMMS: Weekly Primary Mortgage Market Survey average rate for 30-year fixed conforming loans, April 2026 week-ending rate of 7.0% used as the baseline.
- NAR Q1 2026 Metropolitan Median Price Report: Median existing home sale price by metro, Q1 2026. Single-family detached only.
- Monthly PITI calculation: Principal and interest at stated rate + estimated annual taxes and insurance of 1.5% of home value divided by 12. The 1.5% figure is a national average; actual property tax rates vary significantly by state and county.
- Required income calculation: Monthly PITI divided by 0.28 (28% front-end DTI rule) multiplied by 12.