Homeownership affordability is beginning to stabilize, but it has yet to translate into meaningful momentum in home sales, as structural barriers keep many renters on the sidelines. According to Zillow data, the share of renter households in their prime homebuying years who can afford to own a home has stopped declining for the first time in three years, but the improvement is modest and far from a recovery.
In 2024, about 20.4% of renter households headed by someone aged 29 to 43 could afford the monthly cost of owning a typical home in their market with a 5% down payment, up slightly from 20.2% in 2023. That small gain marks a shift after a sharp erosion in affordability, when the ownership-ready share of renters fell from 34% in 2021 to roughly 20% by 2023. In total, the number of ownership-ready renter households has stabilized at about 3.2 million, down from roughly five million in 2021.
Zillow characterized the shift as less a rebound and more a pause in deterioration, citing stabilized mortgage rates and continued income growth as key factors that halted the decline. More recent data suggest affordability may have improved slightly further into 2025, as mortgage payments eased and borrowing power increased.
Even so, affordability gains are not enough to unlock a broader wave of demand. Home prices remain significantly elevated, with the typical U.S. home value still nearly 49% higher in 2024 than in 2019, according to the Zillow Home Value Index. While mortgage rates have eased from recent peaks, the overall cost of entry remains substantially higher than pre-2022 levels, leaving many would-be buyers unable or unwilling to transition into ownership.
Beyond monthly payments, additional barriers continue to suppress home sales activity. Buyers face limited housing inventory, high down payment requirements, elevated closing costs and credit constraints. In many markets, renting remains comparatively more affordable, reducing the urgency to purchase even among households that technically qualify. Zillow noted that uncertainty around personal finances and broader economic conditions continues to weigh on decision-making, reinforcing a wait-and-see approach among many renters.
The required level of savings also significantly changes the ownership picture. In 2024, about 30.7% of homebuying-age renter households could afford ownership with a 20% down payment, while 22.4% could qualify with a 10% down payment. Even at those thresholds, improvements from 2023 were minimal.
In lower-cost markets such as Pittsburgh and Cleveland, roughly one-quarter to one-third of renter households are ownership-ready, while in high-cost metros like San Diego and Los Angeles, fewer than 5% meet the affordability threshold. Significant disparities also persist by race and ethnicity, with Asian renter households showing the highest ownership readiness and Black, Hispanic and Indigenous households trailing well behind.
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