40% of Houston-area households could afford a median priced home

Lower mortgage rates and moderating home prices combined to improve housing affordability in the Houston area during the second quarter of 2026.

According to the latest Housing and Rental Affordability Report from the Houston Association of Realtors, 40% of Houston-area households could afford a median-priced home in the second quarter, up from 36% a year earlier.

The median home price in the Houston metro area declined 1.2% year over year to $345,200. The average 30-year fixed mortgage rate fell to 6.41% from 6.79% during the second quarter of 2025. This contributed to the typical monthly mortgage payment, including principal, taxes and insurance, declining to $2,550 from $2,650 a year earlier.

On average, households needed to earn at least $102,000 annually to purchase a median-priced home, down 3.8% from $106,000 in 2025.

“Houston homebuyers got a little more breathing room during the second quarter,” said HAR Chair Theresa Hill with Compass RE Texas, LLC – Houston. “Lower mortgage rates helped bring down monthly housing costs, and while affordability is still a challenge for many people, even a small drop in rates can go a long way toward making homeownership more attainable.”

Across Texas, affordability also improved during the second quarter. Statewide, 41% of households could afford a home in the second quarter compared to 39% the prior year. Texans needed a minimum annual income of $99,200 to purchase a median-priced home priced at $342,000.

National affordability also improved during the quarter, with the U.S. affordability index rising from 34% to 37%. The national median home price was $434,900, according to the latest data from the National Association of Realtors.

Rental Affordability Update

HAR’s Rental Affordability Index showed rental affordability remained relatively stable during the second quarter of 2026. Approximately 45% of Houston-area households could afford the average lease payment on a single-family rental home, compared to 46% during the same period last year.

The average monthly lease payment increased 2.4% year over year to $2,150, up from $2,100 in the second quarter of 2025. As a result, households needed to earn approximately $86,000 annually, or $7,167 per month, to afford the typical rental payment, compared to $84,000 one year earlier.

Highlights of the Q2 2026 Housing & Rental Affordability Report:

  • 40% of households in the Greater Houston area could afford a median-priced home, up from 36% in the second quarter of 2025.
  • The median home price declined 1.2% year over year to $345,200.
  • The average 30-year fixed mortgage rate declined from 6.79% to 6.41%.
  • The monthly mortgage payment, including principal, taxes and insurance, fell from $2,650 to $2,550.
  • The minimum annual household income needed to purchase a median-priced home declined 3.8%, from $106,000 to $102,000.
  • 45% of Houston-area households could afford the average lease payment on a single-family rental home, compared to 46% a year earlier.
  • The median lease price in the Houston area increased 2.4% to $2,150.

For HAR’s full Housing and Rental Affordability Report and data tables, click HERE.