There’s finally some good news for anyone who’s felt priced out or stuck on the sidelines. Buying a home is starting to feel more affordable again.
Monthly mortgage payments have begun to ease, and the pressure buyers have been dealing with over the last few years is slowly starting to lift. Now, that doesn’t mean affordability challenges have disappeared overnight. But after such a difficult market, even small improvements can make a real difference.
Affordability Is Finally Moving in the Right Direction
One of the clearest ways to understand this shift is by looking at how much of your income it actually takes to afford a home.
According to Zillow, housing is generally considered affordable when your total monthly costs take up 30% or less of your income. That includes your mortgage payment, property taxes, homeowners insurance, and basic upkeep.
Over the past few years, that percentage climbed well above what’s considered comfortable, making homeownership feel out of reach for a lot of buyers. But now, we’re starting to see that gap slowly narrow. Zillow’s research shows it’s taking less of a typical household’s income to buy a home than it did just a few years ago (see graph below):
Affordability is still tight since we have not fully returned to Zillow’s 30% benchmark yet. But the good news is the trend is moving in the right direction, and the market is slowly becoming more manageable for buyers.
Why Affordability Is Improving
So, what’s behind this shift? Mortgage rates have been getting a lot of attention lately, and for good reason. They have dropped noticeably over the past year. But rates are not the only reason affordability is improving.
Here are three key trends that are working in buyers’ favor right now:
1. Mortgage rates have eased. Rates are now near their lowest level in more than three years, which is helping bring monthly payments down (see graph below).
2. Home price growth has slowed. Nationally, prices aren’t dropping, but they are rising much more slowly than they were a few years ago. That means buyers today aren’t facing steep jumps in purchase prices, which helps keep monthly payments manageable and makes buying a home more predictable.
3. Wages are outpacing home price growth. This trend is especially important. 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 significantly.”
None of this makes buying cheap, but it shows why the affordability math is starting to work better than it did just a year ago. The pressures that made homeownership difficult are finally easing. Fleming adds:
“Affordability remains challenging, but for the first time in several years, the underlying forces are aligned for gradual improvement. Mortgage rates may only drift down slowly, but income growth exceeding house price appreciation boosts house-buying power. Affordability won’t rebound overnight, but like a ship catching a steady tailwind, it’s now moving in the right direction.”
Together, these three factors explain why experts expect affordability to continue improving in 2026.
Where Homes Are Becoming Affordable First
So, how much can buyers actually expect affordability to improve? In certain areas, the change could be significant. Zillow reports that some markets are projected to return below the 30% income threshold by the end of the year, making homeownership more achievable for local buyers (see graph below).
That doesn’t mean you have to live in one of these markets or wait until the end of the year to make a move. Many areas are already seeing meaningful improvements in affordability. Connect with a local agent to learn what’s happening in your market, you might be closer to buying a home than you think.
Bottom Line
Affordability is finally starting to improve, and that’s a notable change.
Since these shifts don’t happen uniformly across all markets, knowing what’s happening locally is key. If you want to see how these trends are playing out in our area, let’s connect and go over the details.
