Executive Summary
A buyer of the median-priced U.S. existing single-family home ($432,900, National Association of Realtors Q3 2026, preliminary) needs an annual household income of $124,700 to comfortably afford it with a 20% down payment at the 7.28% 30-year fixed rate (Freddie Mac PMMS, week of October 1, 2026). In the metros needing the most income — San Jose, San Francisco, and San Diego — required qualifying incomes exceed $300,000, 1.9 to 2.7 times HUD's FY2026 area median family income. In eight of the 25 metros the qualifying income sits below the local median, led by Pittsburgh, where $76,000 is needed against a HUD median family income of $110,400.
This analysis draws on HUD FY2026 Income Limits (area median family income), Freddie Mac Primary Mortgage Market Survey (PMMS) rates, and National Association of Realtors (NAR) Q3 2026 median prices of existing single-family homes (preliminary; see the note under Table 1) to produce a standardized affordability index across 25 major U.S. metros.
Key Findings
- A U.S. household needs about $124,700 in annual income to comfortably afford the $432,900 national median-priced home (NAR Q3 2026, preliminary) with 20% down at the October 1, 2026 PMMS rate of 7.28% (NAR, Freddie Mac).
- Each 1-percentage-point rise in the mortgage rate from 7.28% adds about $277/month to the payment on a $400,000 loan — roughly the payment on $41,000 more home price.
- At Q3 2026 prices, the 0.63-point rate rise between August 20 and October 1, 2026 (6.65% to 7.28%) adds $6,200 to the national-median qualifying income (from $118,500) and raises it in every metro — from $3,800 in Pittsburgh to $27,800 in San Jose.
- The metros needing the lowest qualifying income in this 25-metro set are Pittsburgh ($263,800 median, $76,000 income needed), Cleveland ($269,800 / $77,700), San Antonio ($307,600 / $88,600) and Houston ($340,300 / $98,100) — four of the eight metros where the required income sits below HUD's area median family income (the others: Columbus, Kansas City, Atlanta and Raleigh ($131,800 against $132,300)).
- High-cost markets remain out of reach — San Jose's median home price is about $1.92 million.
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 7.28% (Freddie Mac PMMS national average, week of October 1, 2026; the August 2026 refresh used the PMMS 6.65% and the May 2026 edition a 7.0% rate assumption, not a PMMS reading)
- 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-point increase from 7.28% to 8.28% on a $400,000 loan raises the monthly principal and interest by approximately $277 — about the payment on $41,000 more home price at 7.28% under this study's 20%-down PITI model.
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) published by HUD — its FY2026 median family income for the area. A ratio above 1.0 means a family earning the area median cannot qualify for the median-priced home under the 28% rule; a ratio below 0.8 signals meaningful affordability headroom.
| Metro | Median Home Price† | Down Payment (20%) | Monthly PITI | Required Income | HUD AMI (FY2026 median family income) | Affordability Ratio |
|---|---|---|---|---|---|---|
| San Jose, CA | $1,920,000 | $384,000 | $12,910 | $553,300 | $205,500 | 2.69 |
| San Francisco, CA | $1,350,900 | $270,180 | $9,080 | $389,300 | $200,800 | 1.94 |
| San Diego, CA | $1,075,000 | $215,000 | $7,230 | $309,800 | $130,900 | 2.37 |
| Los Angeles, CA | $958,500 | $191,700 | $6,440 | $276,200 | $108,100 | 2.56 |
| Seattle, WA | $772,800 | $154,560 | $5,200 | $222,700 | $164,400 | 1.35 |
| Denver, CO | $651,900 | $130,380 | $4,380 | $187,900 | $144,000 | 1.30 |
| Miami, FL | $660,000 | $132,000 | $4,440 | $190,200 | $89,800 | 2.12 |
| New York, NY | $815,200 | $163,040 | $5,480 | $234,900 | $104,300 | 2.25 |
| Boston, MA | $820,000 | $164,000 | $5,510 | $236,300 | $164,600 | 1.44 |
| Washington, DC | $656,200 | $131,240 | $4,410 | $189,100 | $166,100 | 1.14 |
| Austin, TX | $467,100 | $93,420 | $3,140 | $134,600 | $134,400 | 1.00 |
| Phoenix, AZ | $471,000 | $94,200 | $3,170 | $135,700 | $112,400 | 1.21 |
| Atlanta, GA | $376,800 | $75,360 | $2,530 | $108,600 | $117,800 | 0.92 |
| Charlotte, NC | $433,200 | $86,640 | $2,910 | $124,800 | $117,400 | 1.06 |
| Orlando, FL | $446,000 | $89,200 | $3,000 | $128,500 | $97,600 | 1.32 |
| Tampa, FL | $410,000 | $82,000 | $2,760 | $118,100 | $104,700 | 1.13 |
| Nashville, TN | $419,700 | $83,940 | $2,820 | $120,900 | $116,100 | 1.04 |
| Raleigh, NC | $457,300 | $91,460 | $3,070 | $131,800 | $132,300 | 1.00 |
| Houston, TX | $340,300 | $68,060 | $2,290 | $98,100 | $104,000 | 0.94 |
| San Antonio, TX | $307,600 | $61,520 | $2,070 | $88,600 | $100,600 | 0.88 |
| Jacksonville, FL | $405,000 | $81,000 | $2,720 | $116,700 | $108,700 | 1.07 |
| Kansas City, MO | $371,000 | $74,200 | $2,490 | $106,900 | $113,400 | 0.94 |
| Columbus, OH | $359,000 | $71,800 | $2,410 | $103,400 | $111,500 | 0.93 |
| Cleveland, OH | $269,800 | $53,960 | $1,810 | $77,700 | $105,000 | 0.74 |
| Pittsburgh, PA | $263,800 | $52,760 | $1,770 | $76,000 | $110,400 | 0.69 |
| National Median | $432,900 | $86,580 | $2,910 | $124,700 | — | — |
Source: National Association of Realtors, median sales price of existing single-family homes, Q3 2026 (preliminary; table dated 2026-10-29; see the † note below); HUD FY2026 Income Limits, area median family income (effective May 1, 2026; column re-sourced 2026-10-20); Freddie Mac PMMS 30-year fixed 7.28% (week of October 1, 2026). PITI, required income and ratios recomputed 2026-10-31 at those prices from the formula in the Methodology section (rate previously 6.65%, week of August 20, 2026; the video above was recorded at that 6.65% rate and at earlier prices); the May 2026 edition used a 7.0% rate assumption, not a PMMS reading.
† Re-priced October 31, 2026. Every price in this column and the $432,900 national median are NAR's Q3 2026 median sales prices of existing single-family homes (table dated October 29, 2026; NAR marks the quarter preliminary, and the series is not seasonally adjusted). The previous column matched NAR's Q1 2026 table only for San Jose, San Diego, Los Angeles and New York; the other 21 prices and the previous national median of $420,000 could not be traced to any NAR table. The re-price moved every payment, income and ratio: Jacksonville's price went from $310,000 to $405,000 and Pittsburgh's from $200,000 to $263,800, and eight metros rather than nine now need less than the area median. Required income is this study's model output, not a NAR figure: taxes and insurance are a 1.5% assumption (see Methodology), not a per-metro source.
Correction (October 20, 2026): earlier versions of this study listed area median incomes that did not match HUD's FY2026 Income Limits for any of the 25 metros (for example New York $131,100 against HUD's $104,300, Houston $84,700 against $104,000, Pittsburgh $79,600 against $110,400). The AMI column, the ratios, Table 2, the charts and the text now use HUD's published values; at the prices then shown, nine metros, not four, needed less than the area median to qualify (Charlotte, Raleigh, Houston, San Antonio, Jacksonville moved below 1.0). Table 2 had also labelled the same HUD figures as a Census median household income; it now names them correctly.
The Florida Affordability Paradox
For a county-level view of the same paradox, see our Polk County housing affordability study — the Lakeland–Winter Haven metro has homes well below the national median value and a higher share of cost-burdened homeowners than the nation.
All four Florida metros in this study require more than HUD's area median family income: Miami (2.12 ratio), Orlando (1.32), Tampa (1.13) and Jacksonville (1.07). A family earning the area median would not qualify for the median-priced home at current rates, and the payment takes from 30.0% of monthly median family income in Jacksonville to 59.3% in Miami, against the 28% limit. Texas metros such as Houston (0.94) and San Antonio (0.88) sit below 1.0.
| Metro | Monthly PITI | HUD Median Family Income (monthly) | % of Income to Housing | Affordable at 28% Rule? |
|---|---|---|---|---|
| Miami | $4,440 | $7,483/mo equiv. | 59.3% | No — 31.3 pts over threshold |
| Orlando | $3,000 | $8,133/mo equiv. | 36.9% | No — 8.9 pts over threshold |
| Tampa | $2,760 | $8,725/mo equiv. | 31.6% | No — 3.6 pts over threshold |
| Jacksonville | $2,720 | $9,058/mo equiv. | 30.0% | No — 2.0 pts over threshold |
Source: HUD FY2026 Income Limits (area median family income ÷ 12, effective May 1, 2026); monthly PITI from Table 1 (NAR Q3 2026 prices — see the † note under Table 1).
Rate Sensitivity: How Much Does a 1% Rate Change Matter?
The Freddie Mac PMMS 30-year rate stood at 7.28% in the week of October 1, 2026 (15-year fixed: 6.60%), up from 6.65% on August 20 and its highest weekly reading since 7.29% in the week of November 22, 2023. Since January 2024 it has ranged from 5.98% (week of February 26, 2026) to that 7.28%. 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 Research 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.
State Guides and City Pages
Related research & tools
Frequently Asked Questions
Which metro areas are most affordable for homebuyers in 2026?
Based on National Association of Realtors Q3 2026 prices and HUD and Freddie Mac data, the metros needing the lowest qualifying income among the 25 analysed here are Pittsburgh, PA (median home price $263,800), Cleveland, OH ($269,800), San Antonio, TX ($307,600) and Houston, TX ($340,300).
What annual income is needed to afford a median-priced home in 2026?
At the 7.28% PMMS rate (week of October 1, 2026), the qualifying income for the $432,900 national median home (NAR Q3 2026) with 20% down is $124,700 using the 28% front-end rule. High-cost metros run far above that — San Jose, at a $1,920,000 median, needs $553,300 — while the most affordable metro in this set, Pittsburgh ($263,800 median), needs $76,000.
How has mortgage affordability changed from 2023 to 2026?
Affordability improved modestly from its 2023 trough (when the Freddie Mac 30-year rate peaked at 7.79% in the week of October 26, 2023 and the median income-required was $130,000+) but remains historically strained. The 2024–2026 rate environment — a 5.98%–7.28% range in Freddie Mac's weekly survey, with the October 1, 2026 reading the highest since November 2023 — combined with limited housing inventory keeps the national affordability index 22% below its 2019 pre-pandemic baseline, per Freddie Mac calculations.
Methodology
Data sources and collection parameters for this study:
- HUD FY2026 Income Limits: FY2026 area median family income (MFI) — the figure HUD publishes as the area median income behind its income limits — for the HUD metro area containing each metro's principal county, from HUD's FY2026 Section 8 income-limits file (column median2026), effective May 1, 2026. Used as the denominator for all affordability ratio calculations and for Table 2. The column was re-sourced from that file on 2026-10-20 (see the correction under Table 1).
- Freddie Mac PMMS: Weekly Primary Mortgage Market Survey average rate for 30-year fixed conforming loans. Baseline: 7.28% for the week of October 1, 2026, read from freddiemac.com/pmms on 2026-10-02 (15-year fixed: 6.60%); the rate history quoted on this page is from Freddie Mac's weekly PMMS history. On 2026-10-02 Table 1, Table 2, the national-median figure, the Florida ratios and the charts were recomputed at 7.28% from the formula below; home prices and AMI figures were not re-sourced in that pass. Earlier baselines: 6.65% for the week of August 20, 2026 (read 2026-08-23, 15-year fixed 5.95%; recomputed that day from the May 2026 edition, which used a 7.0% rate assumption rather than a PMMS reading). On 2026-09-17 the San Jose, San Diego and Los Angeles prices were checked against NAR's metro table (released 2026-05-05) and corrected; their PITI, required income and ratio were recomputed with the same formula. On 2026-10-31 Table 1, Table 2, the national-median figure, the Florida ratios and the charts were recomputed at the same 7.28% rate after the price column was re-priced to NAR Q3 2026.
- NAR Q3 2026 Metropolitan Median Price Report: Median sales price of existing single-family homes by metro, Q3 2026 (preliminary, not seasonally adjusted), NAR table dated 2026-10-29, read 2026-10-31. Every price in Table 1 and the national median come from this table.
- 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.
Data & citation
Download the dataset (CSV, CC BY 4.0) on Zenodo: https://doi.org/10.5281/zenodo.23111938. The deposit carries the HUD AMI inputs and the derived payment, qualifying-income and ratio columns; NAR median prices are proprietary and are not redistributed. Note (October 31, 2026): the deposit's current version predates the HUD correction and the NAR Q3 2026 re-price above and carries superseded payment, income, AMI, ratio and share values; use the values on this page until a corrected version is posted.
Suggested citation: Dreamy Leads Research (2026). Mortgage Affordability by Metro, 2026: Qualifying-Income Thresholds Against HUD Area Median Income [Data set]. Zenodo. https://doi.org/10.5281/zenodo.23111938
