Detroit leads the nation in starter home affordability — the median-earning household would spend 13.9 percent on a starter home — according to a new report from Redfin, the real estate brokerage that’s part of Rocket Cos. in Detroit.
Redfin considers a home affordable if a buyer taking out a mortgage would spend no more than 30 percent of their income on their monthly housing payment. Starter homes are those in the 5th to 35th percentile for sale prices.
Buyers in Detroit and Cleveland, which are relatively affordable, typically earn much more than necessary to afford a starter home. In Detroit, for instance, the typical local household earns $65,687, versus the $30,511 necessary to afford the median-priced starter home.
The median-earning household in Detroit is approximately $39,900 per year, while the broader metro Detroit area features a much higher median family and household income estimated between $76,000 and $104,800 depending on specific HUD metro definitions.
Among the 46 metro areas studied by Redfin, Warren also made the list — the median-earning household would spend 18.1 percent on a starter home there.
All starter-home listings are affordable on the area’s median income in nearly half of the metros in the analysis, mostly in the south and Middle America.
The metro areas include Austin, Fort Worth, Charlotte, Dallas, Virginia Beach, Houston, Montgomery County, PA, Washington, D.C., San Antonio, Jacksonville, Milwaukee, Columbus, Cincinnati, Kansas City, Philadelphia, Indianapolis, Baltimore, Warren, Cleveland, St. Louis, Pittsburgh, and Detroit.
Overall, Americans need to earn $70,693 to afford the typical U.S. starter home, down 1.5 percent from a year ago, according to Redfin.
The income needed to afford a starter home — those in the 5th to 35th percentile for sale prices — has been falling since November 2025.
Following Detroit were Pittsburgh (14.8 percent) and St. Louis (14.9 percent).
While starter homes are affordable in much of the country, they are almost impossible for average locals to buy in the most expensive markets.
But the declines are shrinking; in January, for instance, the income needed to afford a starter home fell 5.3 percent year over year. That’s largely because mortgage rates have risen throughout 2026, pushing up housing costs.
The data is based on a Redfin analysis of median home sale prices, prevailing mortgage rates and property-tax payments, and assumes a 15 percent down payment. The report focuses on June 2026 — the most recent period for which data is available.
The typical American household earns an estimated $87,599, about $17,000 more than what’s needed to buy the median-priced U.S. starter home. That gap is widening: A year ago, the typical American earned roughly $12,500 more than they needed to buy a starter home.
Affordability is improving more for entry-level homes than for the housing market as a whole. Americans need to earn $109,796 to afford the typical U.S. home for sale, down just 0.5% from an all-time high of $110,382 a year ago.
The typical household earns about $22,000 less than they need to buy the median-priced home in the overall market. The discrepancy is partly because the overall market is driven by outsized price increases in the luxury segment, and outsized price increases in places like San Francisco and West Palm Beach, where affluent buyers are active.
At the same time, some would-be buyers of starter homes are pulling back because they typically earn less money and are more sensitive to affordability pressures.
While starter-home affordability has improved modestly, it is still strained, with sale prices near record highs and mortgage rates elevated near 7 percent — and it is becoming even more strained, with rates hitting their highest level in a year at the end of July.
Even though starter homes cost less than others, they’re still often out of reach for first-time buyers, especially in expensive markets like coastal California and New York. First-time buyers are also competing with move-up buyers, who typically have equity from previous sales, for starter homes.
“Affordability has improved modestly for entry-level buyers, but starter homes come with tradeoffs, and finding the right one is a challenge,” says Yingqi Xy, a senior economist at Redfin.
“The first-time buyers who are in the market are already stretching their budgets to afford monthly mortgage payments, so they’re hesitant to take on expensive renovations. Move-in ready starter homes attract strong demand, while fixer-uppers aren’t quite as desirable because the buyers who are typically in the market for an inexpensive home don’t have much financial cushion for renovations.”
In three California metro areas — San Diego, Los Angeles, and San Francisco — there are virtually zero starter-home listings affordable on the area’s median income. In Anaheim, 2.6 percent of starter-home listings are affordable to the typical resident, and in San Jose, it’s 7.4 percent.
In Los Angeles, a household earning the median income would spend 51 percent of their income on a starter home, the highest share of the metros in this analysis. Next come two other California metros: Anaheim (47.6 percent) and San Francisco (47.3 percent).
In the Bay Area, the typical starter home costs nearly $1 million, making it tough for even someone earning the area’s high median income to afford. In San Diego and Los Angeles, the typical starter home costs roughly $650,000, putting it out of reach for people earning the median income in those places, which is lower than in the Bay Area, but higher than nationwide.
Starter-home affordability is improving in 30 of the nation’s 50 most populous metro areas. In Austin, Texas, homebuyers needed to earn $92,607 to afford a median-priced home, down 6.1 percent year over year — the biggest decline of the metros in the analysis.
Oakland, Calif., had the second-biggest decline: Buyers there must earn $162,765 down 6 percent year over year. Dallas, where buyers must earn $83,096, down 5.1 percent, rounds out the top three.
To view the full report, including charts and additional metro-level data, visit here.
