For the first time since 2021, the share of homebuying-age renters who could afford a typical home stopped falling after nearly 2 million households lost buying power in just two years
For the first time in three years, the share of renters in their prime homebuying years who could afford to own a home stopped falling. After the steep collapse in affordability starting in 2022, it is a turning point worth paying attention to.
In 2024, about 20.4% of renter households headed by someone ages 29 to 43 could afford the monthly cost of owning a typical home in their market with a 5% down payment, up slightly from 20.2% in 2023. That modest improvement marks the first stabilization after the ownership-ready share of renters fell from 34% in 2021 — a loss of nearly 2 million households in just two years.
Even as monthly affordability improves, home sales remain sluggish. That gap suggests the path back to typical housing activity involves more than just an affordable mortgage payment.
For this analysis, we focus only on homebuying-age renter households, defined here as households headed by someone ages 29 to 43 that rents their home. To be considered able to afford a home purchase, a monthly mortgage payment for a typical home in the metro area would need to take up no more than 30% of that household’s income. Estimates for monthly mortgage payments assume a 5% down payment and include taxes, insurance and maintenance.
In 2024, about 3.2 million of these homebuying-age renter households nationwide had high enough incomes to afford the monthly cost of owning the typical home in their market with a 5% down payment. That equals 20.4% of homebuying-age renter households.
It is not a rebound. But it is an important break from the sharp deterioration that defined the previous two years. Mortgage rates stopped climbing, incomes continued to rise at a steady pace and the share of homebuying-age renter households able to clear the monthly affordability bar stopped falling.
More recent Zillow data suggest that improvements in affordability likely continued into 2025, after the latest American Community Survey dataset used for this analysis ends. In March 2026, the typical U.S. mortgage payment was 4.4% lower than a year earlier, and lower mortgage rates had increased buying power by about $20,000 for a median-income household.
Those conditions may be an early sign that the market could finally turn a corner after bouncing along the bottom since 2023. But affordability is still far from normal.
Zillow’s estimates show that the number of ownership-ready homebuying-age renter households fell dramatically 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 stopped getting materially worse in 2024, but it recovered only a small share of the ground lost during the affordability crunch.
The reason is simple: home prices and monthly payments remain very high. According to the Zillow Home Value Index, the typical U.S. home value in 2024 was nearly 49% higher than in 2019. Even with some easing in mortgage rates since then, the affordability threshold remains much higher than it was before rates surged in 2022.
Still, it is meaningful that the direction has changed. The sharp collapse in ownership readiness was driven by two forces hitting at once: home values rising rapidly over the course of the pandemic and mortgage rates jumping just after. More recently, those pressures have started to unwind.
The size of the down payment still matters, though it does not change the broader story. In 2024, about 4.8 million homebuying-age renter households would have been financially ready to own with 20% down, equal to 30.7% of homebuying-age renter households. With 10% down, that fell to 3.5 million, or 22.4%. Those figures were all slightly better than in 2023, when the comparable shares were 30.3% and 21.7%, respectively.
Despite improving affordability, home sales remained weak through 2025. That gap suggests that even as more homebuying-age renter households regain the ability to afford the monthly payment, many are still delayed by other barriers: limited housing inventory, limited savings for a down payment, elevated closing costs, credit barriers, uncertainty about their financial future and the relative affordability advantage of renting in some markets.
Zillow’s latest forecast still calls for only modest sales growth in 2026, reinforcing the idea that healing in market activity could continue to lag improvements in affordability.
Among the 50 largest metros, the highest ownership-ready shares of homebuying-age renter households in 2024 were typically seen in relatively affordable Midwestern and Southern markets. Pittsburgh led the way, with 33.8% of homebuying-age renter households being ownership-ready with a 5% down payment. It was 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 were some of the country’s most expensive markets. In San Diego, just 4.1% of homebuying-age renter households were financially ready to own in 2024. Los Angeles was close behind at 4.2%, followed by Riverside (4.3%), Providence (4.5%), San Jose (5.8%) and Sacramento (6.9%).
Even as conditions improved nationally, those markets remained largely out of reach because home prices are still too high relative to incomes.
The household-level data also show substantial racial disparities in who is financially positioned to buy, even within the homebuying-age renter population.
In 2024, 41.4% of Asian homebuying-age renter households were homeownership-ready with 5% down, compared with 24.1% of white households, 15.8% of Hispanic households, 10.5% of Black households and 9.3% of Indigenous households.
Those gaps reflect persistent differences in income, wealth and geography, all of which shape whether a renter household can realistically make the leap into ownership.
Our estimates show that homebuying affordability for homebuying-age renter households stabilized in 2024 after two years of steep decline. Since then, affordability improved further as mortgage rates eased and income growth continued to help offset still-high housing costs.
Zillow’s March 2026 Market Report suggests that the typical monthly mortgage payment was 4.4% lower than a year earlier, a meaningful step in the right direction for would-be first-time buyers. Despite the improvement, Zillow forecasts only a modest increase in existing-home sales this year — and energy cost uncertainty could dampen that outlook even further — which is consistent with a market that is stabilizing rather than surging.
The market has improved. It just has not yet fully healed.
