(NewsNation) — Homeownership has become slightly more affordable for the first time since 2020 but remains out of reach for many Americans.

Buyers today would need to earn $115,000 to afford the typical U.S. home, down 1% year over year, according to a new Redfin report. Falling mortgage rates, which just posted the first annual decline in three years, are partly responsible.

Some metros in states like Texas saw some of the largest slashes to home prices than anywhere else in the country. Still, the typical household earns about $84,000 per year — 27% less than it needs to afford the average home, according to Redfin.

How much more affordable are homes?

The average rate on a 30-year mortgage in the U.S. fell earlier this month to its lowest level since Feb. 12, 2023, when it was 6.12%. The change improved housing affordability and reflected a pullback in Treasury yields ahead of an expected interest rate cut from the Federal Reserve.

The average interest rate on a 30-year mortgage fell to 6.5% in August from 7.07% a year earlier. It’s since dropped to 6.09%.

Homebuyers now need to earn $115,000 to afford a median-priced U.S. home with a 15% down payment, according to the report. It’s about a 1% difference compared to the year prior.

Although the decline won’t be enough to catapult most Americans to homeownership, industry experts are celebrating the figure as an important benchmark — the first time buying a home has become even slightly more affordable in the past several years.

Which cities are benefitting the most?   

Texas is home to three of the five metros that saw the most significant declines in income needed to afford a home. The Lone Star State has been building more homes than any other state, which, in turn, presents homebuyers with more options and drives down prices.  

In Austin, homebuyers need to earn $133,346 per year to afford the median-priced home, down 7.9% year over year. That’s the largest decline among the 50 most populous U.S. metropolitan areas, Redfin reported.

San Antonio, Texas, and Oakland, California, followed with a 7.1% and 5.5% decline, respectively. Fort Worth, Texas, also saw a 5.2% decline in the annual income needed to afford a home.

Those markets saw some of the largest cuts to home prices nationwide. Just three other major metros — Jacksonville, Florida; Nashville, Tennessee; and Kansas City, Missouri — saw prices decline.

Who’s paying more?

Not every region saw affordability gains.

Four metros on the East Coast experienced some of the largest increases in income required to afford a home. Unlike Texas, many East Coast metros are dense, and supply is limited.  

In Philadelphia, homebuyers need to earn $82,447 annually to afford the median-priced home. That’s the steepest incline Redfin analyzed — up 5.8% year over year.

Chicago, Illinois; Nassau County, New York; Providence, Rhode Island; and New Brunswick, New Jersey, followed in that order, according to the report.

The Associated Press contributed to this report.