Housing became more affordable for the typical Houstonian during the third quarter of 2024, according to the Houston Association of REALTORS® (HAR).

HAR’s Housing Affordability Index shows that 38% of Houston households could afford a median-priced home, up from 35% during the same time period in 2023. That marks the first annual improvement in affordability since early 2020.

Though the median home price inched up 0.8% year over year to $348,200 in the third quarter, monthly payments on 30-year fixed-rate mortgages dropped from $2,620 to $2,460. That’s thanks to decreasing interest rates, which fell from 7.04% to 6.02%.

As a result, Houston households only needed to make an annual salary of $98,400 to afford monthly mortgage payments on the median-priced home, down from $104,800 in the third quarter of 2023.

“While it’s encouraging to see housing affordability improve slightly, the dream of homeownership is still out of reach for the majority of households in the Houston area,” HAR Chair Thomas Mouton said in the report.