An analysis by Zillow projects that 20 of the 50 largest metropolitan areas in the United States will become more affordable by the end of 2026. Affordability is defined by the company as mortgage payments constituting no more than 30% of the median household income in each area.
While home prices are expected to remain stable across the country, a decline in mortgage rates combined with rising incomes will enhance buyers’ purchasing power next year. Zillow senior economist Kara Ng explained that although affordability will improve nationally, the impact may be less noticeable in already expensive markets such as Seattle, where the share of income devoted to mortgage payments is projected to decrease only slightly from 47% to 45%.
The Midwest is identified as the most affordable region, encompassing nearly half of the cities expected to meet the affordability benchmark in 2026. This trend follows the region’s avoidance of the significant price surges seen during the pandemic, in contrast to the Sun Belt cities, which saw substantial price increases amid high demand for warmer climates and outdoor living.
Zillow highlights a list of 20 metropolitan areas where affordability is forecasted to improve, including several Midwestern cities such as Pittsburgh, Detroit, and Cleveland, as well as cities in the South like Houston, San Antonio, and Birmingham.
For example, Pittsburgh is expected to have a Zillow Home Value Index of $218,845 with a monthly mortgage cost of approximately $1,519, representing 21.4% of the median household income, under the affordability threshold. Similarly, Birmingham is forecasted to require 23.3% of median income for mortgage payments.
Other cities on the list include Indianapolis, Louisville, Buffalo, Oklahoma City, St. Louis, Memphis, Columbus, Kansas City, Minneapolis, Baltimore, Cincinnati, Raleigh, Chicago, and Atlanta. Each of these is anticipated to have mortgage payments dropping below 30% of median incomes, signaling increased accessibility for prospective homebuyers nationwide.
Overall, Zillow’s assessment signals potential relief for Americans seeking homeownership next year, driven by more favorable lending rates and steady housing prices rather than substantial declines in home values.
