Housing affordability hits new lows—even where home prices are falling from 2022 peaks

Why affordability is still strained

Even when a market cools, affordability can stay stuck. The core issue is the long gap between home prices and paychecks: prices surged during the pandemic-era boom, and in many places they never fully reverted to levels local incomes can comfortably support.

Mortgage rates amplify that gap. With 30-year fixed rates still in the mid-6% range, the same home price translates into a meaningfully higher monthly payment than buyers were underwriting a few years ago. [freddiemac.com]

Where prices are actually correcting

A notable slice of large U.S. metros are now at least 10% below their local 2022 peak. ResiClub’s analysis of Zillow Home Value Index data lists 15 big metros meeting that threshold as of spring 2026—including Austin (-27.8%), Punta Gorda (-25.4%), Cape Coral (-18.9%), North Port-Sarasota-Bradenton (-17.5%), and San Antonio (-11.2%). [resiclubanalytics.com]

That doesn’t automatically mean prices are still falling everywhere; it does mean buyers have regained leverage relative to the peak-boom period. As froth comes out, downside risk can lessen—but only if the market clears at prices local incomes can sustain. [fastcompany.com]

Texas case study: softer values, active incentives

Texas illustrates today’s two-track market: resale activity is slower in some corridors, while new construction competes aggressively via incentives. In Bexar County, KSAT reports average sale prices peaked around $345,200 in 2022 and were about $338,800 in 2025 (citing the Texas A&M Texas Real Estate Research Center). [ksat.com]

On the ground, Realtor.com reporting notes builders are using rate buydowns and other incentives, with some buyers seeing fixed rates as low as 3.99% through builder programs. [realtor.com]

In the Dallas-Fort Worth area, local data can look softer year over year: Plano’s median home price in April 2026 was $516,500, down from $550,000 in April 2025, while sales rose to 244 from 218. [communityimpact.com]

Upper Midwest contrast: decade gains still bite

Other regions show a different problem: prices may not be correcting much, and the decade-long run-up is still doing the damage. FOX 9 summarized a report showing Minnesota’s median home price rising from $204,661 (March 2016) to $346,668 (March 2026), a gain of $142,007 (+69.4%). The same summary notes median household income rose 46.4% from 2014 to 2024 to $89,062. [fox9.com]

When prices rise faster than incomes for years, affordability can hit new lows even if the market doesn’t feel ‘hot’ day to day—because buyers are forced to qualify at a higher payment level with stricter debt-to-income constraints and larger down payments.

What to watch next

If you’re tracking affordability in the second half of 2026, the most actionable signals are local:

• **Inventory and new construction:** Markets with more completed and in-progress supply tend to see more builder incentives and softer resale pricing. [realtor.com]
• **Rate path:** Even small moves around the mid-6% range meaningfully change payments for marginal buyers. [freddiemac.com]
• **Local wage growth vs. local home values:** The best ‘cooling’ is a reconnection between prices and paychecks, not just a small dip from a peak. [fox9.com]