Buying Power Surges: Spring Home Shopping Season Poised for Activity
Seattle, WA – February 23, 2026 – The housing market is showing signs of renewed vigor as affordability improves, setting the stage for a more active home shopping season this spring. A Zillow analysis reveals that a median-income U.S. Household can now afford a home priced at $331,483, a significant increase from the previous year.
Affordability Gains Driven by Income and Rates
This $30,302 increase in buying power compared to last year is attributed to rising incomes and declining mortgage rates, according to Zillow. The typical mortgage payment, excluding property taxes and insurance, is 8.4% lower than it was a year ago. Home value growth has stabilized, and mortgage rates have decreased from an average of 6.96% in January 2025 to 6.1% last month.
Highest Buying Power Since 2022
Currently, buying power is at its highest level since March 2022, when mortgage rates were below 5%. The lowest point in recent times was in October 2023, when the affordable home price for a median-income household was $272,224, coinciding with mortgage rates averaging 7.62% – the highest monthly average since 2000. Zillow anticipates further declines in mortgage rates throughout 2026, potentially unlocking even greater buying power for prospective homebuyers.
Impact on the Market
“A more than $30,000 gain in buying power is meaningful for households that have been stretched thin by high rates. It can mean the difference between settling and choosing,” said Kara Ng, senior economist at Zillow. “That doesn’t suddenly make this market affordable for everyone, but it does crack open doors that had firmly shut when rates peaked.”
Regional Variations
The boost in buying power is most pronounced in expensive markets. In San Jose, California, a median-income household has gained nearly $74,000 in purchasing ability compared to the previous year, the largest increase among major metropolitan areas. San Francisco buyers have seen a $56,115 boost, followed by Washington, D.C. ($48,881), San Diego ($46,506), and Boston ($46,390).
Increased Inventory and Options
A median-income household can now afford approximately 82,300 more homes for sale than a year ago. This increase is as well influenced by a recovery in housing inventory, with 6% more homes on the market in January compared to the previous year. Currently, nearly 447,000 homes are within reach for a median-income household, representing 40.3% of all listings – an increase from 34.8% a year ago.
Markets with Growing Affordable Inventory
Houston leads the nation in affordable inventory growth, with nearly 4,000 more listings now accessible to median-income buyers compared to last year. Phoenix follows with 3,434 additional affordable homes, ahead of Dallas (3,267), Miami (2,981), and Atlanta (2,279). These markets have experienced declines in home values since last year.
Metro Area Affordability – January 2026
| Metro Area | January 2026: Affordable Home Price | January 2025: Affordable Home Price | January 2026: Affordable Homes for Sale | January 2025: Affordable Homes for Sale |
|---|---|---|---|---|
| United States | $331,483 | $301,181 | 446,982 | 364,688 |
| New York, NY | $381,237 | $346,450 | 5,831 | 4,718 |
| Los Angeles, CA | $421,030 | $379,754 | 1,107 | 447 |
| Chicago, IL | $299,770 | $274,738 | 7,385 | 6,807 |
| Dallas, TX | $347,681 | $319,291 | 10,979 | 7,712 |
| Houston, TX | $298,282 | $274,173 | 12,176 | 8,180 |
| Washington, DC | $519,441 | $470,560 | 6,000 | 4,028 |
| Philadelphia, PA | $346,797 | $315,469 | 6,112 | 5,400 |
| Miami, FL | $300,704 | $276,987 | 15,903 | 12,922 |
| Atlanta, GA | $362,571 | $330,769 | 12,551 | 10,272 |
For those tracking their affordability, Zillow Home Loans’ BuyAbility℠ tool offers a personalized estimate based on income, credit profile, and current mortgage rates.
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