Buying a Home Is Finally Becoming More Affordable
There’s some long-awaited good news for buyers who’ve felt priced out or stuck on the sidelines.
Affordability is beginning to improve.
Monthly mortgage payments have started to ease, and while buying a home isn’t suddenly “cheap,” the intense pressure buyers have felt over the past few years is finally starting to loosen. After an extended period of rapid price growth and higher rates, the market is gradually shifting in a more balanced direction.
Affordability Is Moving the Right Way
One of the clearest ways to measure affordability is by looking at how much of a household’s income goes toward homeownership.
According to Zillow, housing is generally considered affordable when it takes 30% or less of your monthly income to cover your mortgage payment, property taxes, insurance, and basic maintenance costs.
In recent years, that percentage climbed well above the 30% benchmark, putting homeownership out of reach for many households. Now, that number is beginning to decline. While we’re not fully back to the ideal affordability range yet, the trend is improving — and that shift matters.
What’s Driving the Improvement?
Several key factors are working together to create better conditions for buyers:
1. Mortgage rates have eased.
Rates are hovering near their lowest levels in more than three years. Even modest rate declines can significantly lower monthly payments, improving purchasing power for buyers.
2. Home price growth has cooled.
Nationally, prices aren’t falling, but they’re rising at a much slower pace than in the past few years. Slower appreciation means fewer sudden jumps in purchase prices, making the market more predictable and manageable for buyers.
3. Wages are rising faster than home prices.
This is a major factor. When incomes grow faster than home values, buying power improves — even if mortgage rates don’t drop dramatically. As Mark Fleming, Chief Economist at First American, explains:
“When income growth exceeds house price growth, house-buying power improves—even if mortgage rates don’t decline meaningfully.”
In other words, the math is starting to work more in buyers’ favor. The forces that strained affordability — surging prices and higher rates — are easing. And while affordability won’t rebound overnight, the overall direction is finally positive.
As Fleming adds:
“Affordability remains challenging, but for the first time in several years, the underlying forces are finally aligned toward gradual improvement… Affordability won’t snap back overnight, but like a ship finally catching a steady tailwind, it’s now sailing in the right direction.”
Economists expect this gradual improvement to continue into 2026.
Where Affordability Is Improving First
Some markets are seeing stronger improvements than others. Zillow projects that certain areas could fall back under the 30% affordability threshold by the end of the year.
But you don’t necessarily need to wait — or move — to benefit. Many markets are already seeing noticeable shifts in buyer conditions. Inventory levels, local price trends, and regional wage growth all play a role in how affordability improves from one area to another.
That’s why local insight matters. National headlines tell part of the story, but what’s happening in your specific market is what truly determines your buying power.
The Bottom Line
For the first time in several years, home affordability is easing. It’s not a dramatic turnaround — but it is a meaningful shift.
And because this improvement isn’t happening uniformly across the country, understanding your local market is key. If you’re wondering how these trends are playing out in your area, connecting with a knowledgeable local real estate agent can help you determine whether now is the right time to make your move.