Key Points:
- House-buying power enters the 2026 spring home-buying season above the national median list price for the first time in more than three years.
- In December 2025, house-buying power reached $417,000 at the national level, a five percent surplus above the national median list price of $396,000.
- While still below pre-pandemic norms, the modest surplus should support a stronger spring sales season than buyers and sellers have seen in recent years.
Spring break may be arriving a little early for home buyers this year. Late last year, house-buying power surpassed the national median list price for the first time in more than three years, which could support a more vibrant spring home-buying season than in recent years, as more homes fall within buyers’ budgets.
“House-buying power reached a significant milestone, surpassing asking prices at the national level for the first time in more than three years.”
Fast Moving Budgets and Sticky Prices
For most families, buying a home is less about the list price and more about fitting the mortgage payment within their monthly budget, which is a function of their house-buying power. Our house-buying power metric estimates how much home a buyer can afford based on median household income1, the prevailing 30-year, fixed mortgage rate, and an assumption that one-third of a family’s pre-tax income is allocated to a mortgage payment with a 5 percent down payment. When mortgage rates fall, house-buying power increases. When household income rises, house-buying power also increases.
Because mortgage rates can change quickly, house-buying power and household budgets can also change quickly. List prices, by contrast, tend to adjust more slowly. List prices are often anchored to recent comparable sales or seller biases that may reflect conditions of the past, rather than the current market.
To track fast-moving budgets versus stickier prices at the national level, we estimate median monthly house-buying power from 2018 through 2025 and compare that to the Zillow’s median list price over the same period2. The percentage difference represents the buying-power surplus or deficit of buyer budgets relative to the median list price.
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From Surplus to Deficit—and Back Again
In the early pandemic years, median house-buying power surged as mortgage rates dropped to historic lows, exceeding $500,000 by late 2021. List prices also jumped amid strong demand and limited supply, but at roughly half the pace of buying power. The result was a 50 percent surplus between house-buying power and asking prices.
That dynamic reversed in 2022. As mortgage rates rapidly climbed, house-buying power dipped below $340,000. At the same time, list prices remained elevated, supported by tight inventory and the rate lock-in effect. The surplus flipped to a deficit, reaching a peak of 15 percent in late 2023.
Since then, the deficit has gradually narrowed. Mortgage rates have declined from their peak and household income has continued to rise, while national price growth has basically flatlined. By December 2025, house-buying power returned to $417,000, returning median house-buying power to surplus territory relative to median list price for the first time since 2022.
Is the Spring Home-Buying Season Slump Finally Over?
The increase in sales activity late last year coincided with house-buying power moving back above the median list price nationally. Whether price growth stays contained this spring will depend in large part on how supply evolves relative to demand. If supply remains tight and house-buying power stays ahead of list prices, the spring home-buying season may break out of a three-year slump, even if just modestly.
[1] Median household income is based on the latest U.S. Census Bureau American Community Survey (ACS) data through 2024. To estimate current income levels, we project the ACS series forward using the latest wage growth data from the U.S. Bureau of Labor Statistics (BLS).
[2] The Zillow Median List Price series is reported as a three-month moving average. For consistency, we likewise apply a three-month moving average to our buying-power series.
