Home Affordability is Getting Better

After years of discouraging headlines and financial strain, hopeful buyers are finally seeing a bit of light at the end of the tunnel. The overall cost of purchasing a home is starting to relax.

Monthly mortgage payments are easing, and the intense pressure many buyers have felt is beginning to subside. This doesn’t mean homes are suddenly cheap or that the market is easy to enter overnight but after such a difficult stretch, even small improvements are a welcome change.

Affordability Is Starting to Improve

A common way to gauge housing affordability is by measuring how much of a household’s income goes toward housing expenses. Zillow considers housing “affordable” when costs like mortgage payments, property taxes, insurance, and basic maintenance stay at or below 30% of income. In recent years, that figure climbed well above the recommended level, pushing homeownership out of reach for many.

That pattern is now shifting. According to recent Zillow data, the average household is devoting a smaller portion of income to housing than it did a few years ago. While we haven’t fully returned to the ideal 30% benchmark, the progress is real and it’s headed in the right direction.

What’s Behind the Shift?

Falling mortgage rates have captured a lot of attention, and understandably so. Lower rates directly reduce monthly payments. But they’re only one piece of the puzzle. Several trends are working together to provide buyers with some breathing room:

• Mortgage rates have declined
  Rates are sitting near their lowest levels in over three years, helping ease monthly costs.
  

• Home prices are rising more slowly
  Prices aren’t dropping across the board, but the pace of growth has cooled significantly compared to the rapid increases of recent years. That moderation makes homeownership more manageable.
  

• Wages are growing faster than home prices
  This is a key development. As First American Chief Economist Mark Fleming notes, when incomes outpace home price growth, buyers gain purchasing power even without dramatic drops in interest rates.

Together, these factors explain why buying a home today feels slightly more attainable than it did even a year ago. The forces that once strained affordability are finally starting to ease. As Fleming puts it, “Affordability remains challenging, but for the first time in several years, the underlying forces are finally aligned toward gradual improvement… It won’t improve overnight, but like a ship catching a steady tailwind, it’s now moving in the right direction.” Economists expect this gradual improvement to continue into 2026.

Where Improvements Are Showing Up First

Affordability gains aren’t happening evenly across the country. Zillow reports that some markets could dip back below the 30% affordability threshold by the end of the year.

That said, you don’t have to live in one of those specific areas or wait to benefit. Many other markets are already seeing meaningful progress. This is where working with a local real estate professional (like me) can make a difference. I can help you understand what’s happening in your area and whether buying a home is more achievable than you might think.

For the first time in quite a while, homeownership is becoming more affordable and that’s a notable shift. Since these changes vary by location, staying informed about local trends is key. The chance to buy may be closer than you realize. Let’s connect and talk about your goals.