First, the bad news: As of February, the typical American household earns $29,448 less than it needs to afford a median-priced home, according to new findings from Redfin.

Buyers needed to bring in an annual income of $113,520 to afford a median-priced home in February — 35% more than the median household income of $84,072.

The good news? That’s actually an improvement. When Redfin performed the same study in October (when mortgage rates approached 8%), the typical household earned $40,180 less than it needed. Buyers needed $120,500 to be able to purchase a median-priced home, a record 51% above the $79,689 median household income.

Or is that actually more bad news?

“For over a decade, America has been slowly marching toward a housing affordability crisis due to chronic underbuilding, and that crisis was kicked into overdrive when the pandemic homebuying boom fueled a meteoric rise in housing prices,” said Elijah de la Campa, senior economist at Redfin.

“Now there’s another culprit squeezing homebuyers: elevated mortgage rates. We’re slowly climbing our way out of an affordability hole, but we have a long way to go. Rates have come down from their peak, and are expected to fall again by the end of the year, which should make homebuying a little more affordable and incentivize buyers to come off the sidelines.”

The last month in Redfin’s data when a typical household earned more than it needed to be able to afford a median-priced home was February 2021. Median household income during that month was $69,021, up 6% from the typical $65,292 price tag of a home.

Affordability is suffering because the cost of buying a typical house is climbing much faster than the median household income. The typical income necessary to buy a home in February 2024 was up 12% year over year. Meanwhile, the typical household income has grown just 6% over that same period, half as fast as the pace of incomes needed to buy.

The crisis is exacerbated in the country’s major metro areas, seven of which have typical household incomes that are over 50% less than what a buyer would need for a home purchase. In Los Angeles, for example, the typical household earned 60% less than the income needed to buy at median price. In nearby Anaheim, the typical household earns 58% less. San Francisco is also at 58%, while fellow California cities San Jose and San Diego are both at 55%.

Potential homebuyers make more than they need to buy in just 10 major cities: Detroit (where the typical household earns 39% more than what they’d need), Cleveland (29%), St. Louis (29%), Indianapolis (11%), Cincinnati (20%), Baltimore (9%), Milwaukee (5%), Kansas City (4%) and Minneapolis (4%).