At a Glance: 

• Housing affordability has reached its strongest level in nearly four years, based on recent housing market and mortgage rate data. 
• The income needed to purchase a median‑priced home declined 4% year over year. 
• Wage gains and steady mortgage rates supported improved affordability. 
• Home prices continue to rise on a year-over-year basis, remaining a key affordability constraint. 

Housing affordability has improved to its strongest level since March 2022, as stabilizing mortgage rates and income growth have helped improve purchasing power, according to recent housing affordability data.^1,2 This marks a meaningful improvement from conditions seen over the past two years, when higher borrowing costs significantly reduced affordability. 

Mortgage rates have stabilized in recent months and moved modestly lower compared to prior peaks, helping reduce monthly payment burdens for buyers.³ At the same time, moderating inflation and steady wage growth have helped support household purchasing power. 

While these trends have helped ease affordability pressures, housing costs remain elevated compared to historical norms, and affordability continues to be a key consideration for many prospective buyers. 

Income Required to Purchase a Home Has Declined 

 The annual income required to afford a median-priced U.S. home declined to $111,252, based on a median home price of approximately $426,747, according to Redfin’s latest housing affordability analysis.⁴ This represents a 4% improvement compared to one year ago, when approximately $115,870 in annual income was required.⁵  

These estimates are based on standard affordability assumptions, including prevailing mortgage rates and the commonly referenced guideline that housing expenses should not exceed approximately 30% of gross household income. 

Despite this improvement, required income levels remain significantly higher than pre-2022 levels, reflecting the impact of elevated home prices and borrowing costs. 

Regional Markets Showing Improving Affordability 

 Several Southeast and Mid-Atlantic markets have experienced notable year-over-year declines in the income required to purchase a home, according to Redfin.⁶ 

Notable examples include: 

• Jacksonville, FL: -5.9% 
• Richmond, VA: -5.3% 
• Atlanta, GA: -4.8% 
• Raleigh, NC: -4.8% 

These improvements reflect moderating mortgage rates and steady income growth across many regional markets. While affordability remains constrained compared to historical levels, these trends may provide modest relief for prospective homebuyers entering the spring buying season. 

“We’re seeing improving affordability and more stable mortgage rates help restore confidence among buyers across the Carolinas,” said Steve Ray, Mortgage Regional Sales Manager at Ameris Bank. “As monthly payment expectations become more predictable, more buyers are moving forward with pre-approvals and re-engaging in their home search, particularly those who had paused when rates were at their recent highs. With the spring market approaching, these improving conditions are helping position both buyers and sellers for a more active season.” 

Mortgage Rates Decline Following Cooling Inflation Data 

 Recent inflation data showed continued moderation in price pressures. Consumer prices increased 0.2% in January, while annual inflation slowed to 2.4%, down from 2.7% in the prior month, according to the U.S. Bureau of Labor Statistics.⁷ 

Following this report, mortgage rates declined modestly. The average rate for a 30-year conforming mortgage fell to approximately 5.98%, down from just over 6.03% earlier in the week.⁸ Lower mortgage rates improve affordability by reducing monthly payments and increasing purchasing power. 

At the same time, home prices have continued to rise on a year-over-year basis, reflecting ongoing demand and limited housing supply in many markets.⁹ Stable or improving financing conditions may help prospective buyers better navigate these market dynamics. 

"Improving affordability and stabilizing mortgage rates are helping create more clarity for buyers across a wide range of situations," said Brett Hively, Senior Vice President, Mortgage Capital Markets and Financial Strategist at Ameris Bank. "As we move toward the spring buying season, these trends are helping more borrowers move forward with greater confidence in their financing options." 

¹https://mortgagetech.ice.com/resources/data-reports/february-2026-mortgage-monitor 

^{2, 4, 5, 6}https://www.redfin.com/news/homebuying-affordability-improving-2026/ 

^{3, 8}https://www2.optimalblue.com/obmmi 

⁷https://www.bls.gov/news.release/cpi.nr0.htm 

⁹https://www.realestatenews.com/2026/02/12/existing-home-sales-slide-even-as-affordability-improves 

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. Ameris Bank does not endorse nor is affiliated with the companies listed in this article.