After years of difficult headlines and tight budgets, there’s finally some encouraging news for hopeful homebuyers: the cost of buying a home is starting to ease.
Monthly mortgage payments are coming down, and the pressure buyers have been feeling is beginning to lift. This doesn’t mean homes are suddenly cheap or that everyone can jump into the market right away. But after how challenging the last few years have been, even modest progress is worth paying attention to.
Affordability Is Finally Moving in the Right Direction
One of the best ways to measure housing affordability is by looking at how much of a household’s income goes toward housing costs. Zillow considers housing “affordable” when total monthly expenses such as your mortgage payment, property taxes, insurance, and basic maintenance take up no more than 30% of your income.
In recent years, that percentage climbed well above the 30% benchmark, pushing homeownership out of reach for many buyers. Now, that trend is beginning to reverse. According to recent Zillow data, the typical household is spending a smaller share of its income on housing than it did just a few years ago. While we’re not fully back to the comfort zone yet, the improvement is real and it’s heading in the right direction.
What’s Behind the Improvement?
Lower mortgage rates have received a lot of attention lately, and for good reason. Rates have fallen from recent highs, which helps reduce monthly payments. But that’s only part of the story. Several factors are working together to improve affordability:
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Mortgage rates have cooled: Rates are hovering near their lowest point in more than three years, directly lowering monthly housing costs.
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Home price growth has slowed: Prices aren’t dropping nationwide, but they’re rising at a much more manageable pace than they were a few years ago. That makes payments more predictable and easier to plan for.
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Income growth is outpacing home prices: This may be the most important shift. When wages rise faster than home prices, buyers gain purchasing power even if mortgage rates don’t fall dramatically.
Together, these changes help explain why buying a home today feels more achievable than it did even a year ago. The same forces that squeezed affordability for so long are finally starting to loosen. As First American Chief Economist Mark Fleming puts it, “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.” Because of these trends, economists expect affordability to continue improving into 2026.
Where Affordability Is Improving First
Affordability isn’t improving at the same pace everywhere. Zillow reports that some markets could fall back under the 30% affordability threshold by the end of the year. That said, you don’t need to wait or live in one of those specific areas to benefit. Many markets are already seeing meaningful improvements.
That’s why working with a local real estate expert like myself matters. I can help you understand what’s happening in your area and whether buying a home is more realistic than you might think.
For the first time in quite a while, homeownership is becoming a little more affordable and that’s a meaningful shift. Because these changes aren’t happening evenly across the country, staying informed about local trends can make all the difference. The opportunity to buy may be closer than you think. Reach out today, and let’s talk about your goals!
