For the first time since 2021, the share of homebuying-age renters who can afford a typical home has stopped declining, marking a turning point after nearly 2 million households lost buying power in just two years.

In 2024, the share of renter households in their prime homebuying years able to afford the monthly cost of owning a typical home stabilized after two consecutive years of steep declines. While the improvement is modest, it represents a break from the rapid deterioration that began in 2022.

Approximately 20.4% of renter households aged 29 to 43 could afford a typical home with a 5% down payment in 2024, up slightly from 20.2% in 2023. That marginal gain follows a dramatic drop from 34% in 2021, underscoring the scale of the affordability shock that reshaped the housing landscape.

The Worst of the Shock May Be Over

For this analysis, homebuying-age renters are defined as households headed by individuals between the ages of 29 and 43 who currently rent their homes. To qualify as “ownership-ready,” a household must be able to afford a typical home in its metro area, with monthly housing costs — including mortgage payments, taxes, insurance and maintenance — not exceeding 30% of income, assuming a 5% down payment.

By that measure, roughly 3.2 million renter households nationwide met the affordability threshold in 2024, representing 20.4% of homebuying-age renters.

That figure does not signal a rebound. But it does mark a meaningful shift: the sharp deterioration that defined the previous two years has finally stopped.

Mortgage rates have stabilized, incomes have continued to rise steadily, and the share of renters able to meet affordability thresholds has leveled off. More recent data from Zillow suggest that these improvements likely extended into 2025.

As of March 2026, the typical U.S. mortgage payment was approximately 4.4% lower than a year earlier, while declining rates increased purchasing power by about $20,000 for a median-income household.

These trends may signal that the housing market is beginning to turn a corner after effectively bottoming out in 2023. Still, affordability remains far from normal.

The number of ownership-ready renter households fell sharply from about 5 million in 2021 to 3.3 million in 2022, then to 3.1 million in 2023, before edging up slightly to 3.2 million in 2024.

In other words, affordability has stopped getting worse — but it has recovered only a fraction of what was lost.

The reason is clear: housing costs remain elevated. According to the Zillow Home Value Index, the typical U.S. home value in 2024 was nearly 49% higher than in 2019. Even with easing mortgage rates, the cost of entering the market remains significantly higher than before 2022.

Sales Remain Sluggish Despite Improving Conditions

Even as affordability stabilizes, home sales have remained subdued through 2025, revealing a persistent disconnect between financial capability and actual purchasing activity.

A range of structural barriers continues to delay buyers. Limited housing inventory, insufficient savings for a down payment, elevated closing costs, credit constraints and broader economic uncertainty all weigh on demand. In some markets, renting remains relatively more affordable, further discouraging home purchases.

Zillow’s latest forecast points to only modest growth in home sales in 2026, suggesting that recovery in market activity will likely lag behind improvements in affordability.

A Deeply Uneven Housing Landscape

Homebuying potential varies dramatically across the country, underscoring the fragmented nature of the U.S. housing market.

Among the 50 largest metro areas, the highest shares of ownership-ready renters are concentrated in more affordable Midwestern and Southern cities. Pittsburgh leads the nation, with 33.8% of renters able to afford a typical home with a 5% down payment, followed by Cleveland (27.1%), Buffalo (26.3%), Birmingham (25.9%), Detroit (24.9%) and Chicago (24.1%).

At the other end of the spectrum are some of the country’s most expensive markets. In San Diego, just 4.1% of renter households could afford a typical home in 2024. Los Angeles followed at 4.2%, alongside Riverside (4.3%), Providence (4.5%), San Jose (5.8%) and Sacramento (6.9%).

Even as national conditions improve, these high-cost markets remain largely out of reach, with home prices continuing to outpace incomes.

Persistent Gaps in Buyer Readiness

Data also reveal significant disparities in homebuying readiness across racial groups.

In 2024, 41.4% of Asian renter households were ownership-ready with a 5% down payment, compared with 24.1% of white households, 15.8% of Hispanic households, 10.5% of Black households and 9.3% of Indigenous households.

These differences reflect longstanding gaps in income, wealth and geographic opportunity — all of which shape access to homeownership.

A Market Stabilizing — Not Surging

The direction of the housing market has shifted. The sharp affordability collapse of the past two years has eased, and early signs of stabilization are now evident.

But stabilization should not be mistaken for recovery.

Affordability has improved.
The market, however, has yet to fully heal.

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