Affordability Improves Slightly for Starter Homes

Seattle, WA, August 6, 2026—”Americans need to earn $70,693 to afford the typical U.S. starter home, down 1.5% from a year ago,” reports Redfin. “The income needed to afford a starter home–those in the 5th to 35th percentile for sale prices–has been falling since November 2025. 

“But the declines are shrinking; in January, for instance, the income needed to afford a starter home fell 5.3% year over year. That’s largely because mortgage rates have risen throughout 2026, pushing up housing costs.

Redin consider “a home affordable if a buyer taking out a mortgage would spend no more than 30% of their income on their monthly housing payment. Starter homes are those in the 5th to 35th percentile for sale prices. This is based on a Redfin analysis of median home sale prices, prevailing mortgage rates and property-tax payments, and assumes a 15% down payment. This report focuses on June 2026—the most recent period for which data is available.

“The income needed to buy a starter home is declining while earnings are rising. The typical American household earns an estimated $87,599, about $17,000 more than what’s needed to buy the median-priced U.S. starter home. That gap is widening: A year ago, the typical American earned roughly $12,500 more than they needed to buy a starter home.”