Home Prices Remain High, But Some Cities Are Becoming More Affordable

The U.S. housing market in 2024 offered little relief for homebuyers struggling with affordability, but a few cities bucked the trend, providing glimmers of hope for those looking to buy.

On average, U.S. households spent 41.8% of their median income on monthly mortgage payments last year, slightly down from 42.2% in 2023, according to real estate brokerage Redfin. While the slight decrease is positive, it’s still far from the recommended 30% threshold that financial experts say housing costs should not exceed—a benchmark that’s been out of reach for most U.S. households since 2020.

Where Buying is Getting Easier
Certain cities have seen housing affordability improve significantly, with Texas emerging as a standout. Austin, for example, saw the share of median income needed for a home drop 3.2 percentage points to 39.6%. This improvement was driven by a 2.3% decline in home prices and a 5.1% increase in local incomes.

Austin’s housing market, which had skyrocketed during the pandemic, has since cooled. Prices, which surged by as much as 62.6% from late 2019 to their peak, are now 12% lower than their 2022 highs, according to the Austin Board of Realtors. However, housing costs in the city remain significantly above pre-pandemic levels.

Other Texas cities also saw notable affordability gains:

- San Antonio: Housing costs dropped 2.3 percentage points.
- Dallas: Costs improved by 2 percentage points.
- Fort Worth: Affordability rose by 1.6 percentage points.

Beyond Texas, Portland, Oregon, rounded out the top five, with housing costs falling by 1.3 percentage points relative to incomes.

The Midwest Stands Out for Affordability
While Texas cities led in improvement, the Midwest retained its reputation for affordability. Redfin’s analysis shows that buyers in cities like Pittsburgh, Detroit, and St. Louis spent between 25% and 26% of their median income on housing—comfortably below the national average.

Across the 50 cities analyzed, only eight metropolitan areas had housing costs below the 30% threshold, highlighting the ongoing challenges for most U.S. buyers.

California Tops the List of Least Affordable Cities
Unsurprisingly, California’s major metropolitan areas remain the most expensive for homebuyers. The top five least affordable cities—San Diego, San Jose, Anaheim, San Francisco, and Los Angeles—required as much as 77.6% of median income for monthly mortgage payments.

Shifts in Migration Patterns
In response to soaring home prices, many Americans have sought more affordable living situations. States like West Virginia, Delaware, and South Carolina led the nation in inbound moves in 2024, according to United Van Lines. This reflects a growing trend of Americans prioritizing financial stability and quality of life over remaining in high-cost urban centers.

Looking Ahead
Despite rising inventory in some markets, experts predict that affordability challenges will persist in 2025. “Even with inventory trending upwards, we still expect prices to continue rising due to a lack of homes for sale—pushing more would-be buyers to rent instead,” said Elijah de la Campa, a senior economist at Redfin.

While affordability improvements in cities like Austin and Pittsburgh are promising, they remain the exception rather than the rule in an otherwise challenging housing market.