Softening mortgage rates contributed to improved affordability in greater Houston during the second quarter of the year as 39% of area households could afford a median-priced home, up from 37% during the same time last year.

According to the Houston Association of Realtors®’ quarterly Affordability Report, the median home price declined 0.6% year over year to $349,000 as the average monthly mortgage rate decreased to 6.79%. As a result, the average monthly mortgage payment decreased to $2,460, down from $2,510 in the second quarter of 2024.

Given that increased affordability, Houston households needed a yearly income of at least $98,400 to afford a median-priced home, down 2% year over year. Nearly 40% of area households make that much money annually.

That makes Houston more affordable than the typical U.S. metro area: Nationwide, only 34% of households could afford the median-priced home price of $429,400.

“While affordability challenges remain for many people, the Houston market is showing encouraging signs of balance,” said HAR Chair Shae Cottar. “Mortgage rates have been edging lower and recently hit their lowest point since April, which could draw more prospective buyers to the market.”

Rental affordability also improved in the area as 46% of households could afford the average lease price, up from 43% a year ago. Metro-wide, lease prices for single-family homes decreased by about $90 per month to $2,100, meaning households need an annual household income of $84,000 to afford rent.