A growing number of major U.S. markets are inching closer to a key benchmark used to measure affordability, according to a new housing affordability forecast that suggests modest but meaningful progress ahead.

This year, the mortgage payment for a typical home is expected to meet the affordability standard — costing no more than 30% of median household income — in 20 of the nation’s 50 largest metro areas. Chicago, Atlanta and Raleigh, North Carolina, are newly added to that list, according to a new Zillow report.

Down payments, however, remain a major obstacle. Zillow’s analysis assumes a 20% down payment, which would total roughly $71,800 for a typical home priced at $359,078 — a barrier for many prospective buyers.

What’s driving the shift: Homes have not been considered affordable in this many large metros since mortgage rates began rising in 2022. Slower home price growth, easing mortgage rates and rising incomes are all contributing to what Zillow describes as a “nationwide improvement in affordability.”

By the end of 2026, Zillow projects that mortgage costs nationwide will equal 31.8% of median household income. While still well above the pre-pandemic norm of roughly 23%, this would mark a notable decline from the peak of 38.2% recorded in October 2023.

These gradual gains are exactly what the housing market needs at this stage of its recovery, according to Zillow Senior Economist Kara Ng.

“This is what a small-wins year looks like for housing,” Ng said in a statement accompanying the report. “Rising incomes, subdued price growth and gradually easing mortgage rates help buyers regain their footing while allowing homeowners to continue building wealth.”

Where affordability improves the most tends to follow a familiar pattern. According to Ng, lower-cost markets in the Midwest and Inland South continue to rank best overall, while affordability is rebounding fastest in areas where builders responded effectively to pandemic-era demand spikes.

“New inventory gives move-up buyers more options, while smaller, denser housing helps first-time buyers,” Ng said in an email to Real Estate News. “Since renting competes with buying, the surge in multifamily construction over the past three years is also helping cool price growth.”

While 20 major metros are expected to fall at or below the 30% affordability threshold by year-end, another 14 are projected to land between 30% and 35%, still elevated but improving.

At the other extreme, mortgage costs are expected to exceed 50% of median household income in five major markets: New York, Los Angeles, San Francisco, San Diego and San Jose. Hartford, Connecticut, is the only large metro forecast to see affordability worsen in 2026.

One of the biggest expected shifts is in New Orleans. Zillow economists forecast home values there will fall 4.5% in 2026 — the largest projected drop among major markets — cutting average monthly mortgage costs by about $104.

“Home values rose slightly in 2025, but competition is weak heading into 2026,” Ng said. “Inventory is up 20% year over year, homes are taking longer to sell, and rising insurance costs are reducing buyers’ purchasing power.”