Redfin says starter-home income threshold fell 1.5% in June 2026

Americans needed to earn $70,693 to afford the typical U.S. starter home in June 2026, down 1.5% from a year earlier and marking eight straight months of declines, Redfin said. The report defines starter homes as properties in the 5th to 35th percentile for sale prices and treats a home as affordable when a buyer with a mortgage spends no more than 30% of income on monthly housing costs, assuming a 15% down payment. Redfin said the typical U.S. household earns an estimated $87,599, about $17,000 more than required for a starter home, up from roughly $12,500 a year earlier. Affordability has improved faster at the entry level than across the broader market because starter-home prices rose 1.2% year over year in June, versus 2.2% for all homes. Americans still needed $109,796 to afford the typical home overall, down 0.5% from an all-time high of $110,382 a year earlier, leaving the typical household about $22,000 short. Redfin said mortgage rates have risen through 2026 and were elevated near 7%, reaching their highest level in a year at the end of July, which has kept affordability strained despite some easing. Austin led metro-level gains, with the income needed to afford a median-priced starter home falling 6.1% to $92,607, followed by Oakland, California, down 6% to $162,765, and Dallas, down 5.1% to $83,096. Detroit, Cleveland and Nassau County, New York, became less affordable by this measure, though Redfin said households in Detroit and Cleveland still generally earn well above what is needed to buy a starter home. The report also highlighted a sharp geographic divide: all starter-home listings were affordable on local median income in 22 major metros, mostly in the South and Middle America, while California markets such as San Diego, Los Angeles and San Francisco had virtually no affordable starter-home listings for typical local earners.