Homebuying Is Finally Becoming More Affordable

After years of feeling priced out or stuck on the sidelines, buyers are finally getting a bit of welcome news: homebuying affordability is improving.

Monthly housing payments have begun to ease, and while buying a home still isn’t easy, the pressure buyers have felt over the past few years is starting to loosen. This shift matters—especially after such a challenging stretch in the market.

Affordability Is Moving in the Right Direction

One of the clearest ways to measure affordability is by looking at how much of a household’s income goes toward housing costs.

According to Zillow, housing is generally considered affordable when total monthly costs—mortgage, taxes, insurance, and basic maintenance—take up 30% or less of household income. For the past several years, that percentage climbed well above the norm, pushing homeownership out of reach for many buyers.

Now, that trend is slowly reversing. Zillow data shows that the share of income needed to purchase a home has declined compared to recent years. While we haven’t fully returned to the 30% benchmark, the trajectory is improving—and that’s an important change.

What’s Driving the Improvement?

Several factors are working together to improve affordability for buyers:

1. Mortgage rates have eased.Rates are hovering near their lowest levels in more than three years, helping bring monthly payments down and improving purchasing power.

2. Home price growth has slowed.While prices aren’t falling nationally, they’re increasing at a much more moderate pace than in recent years. This steadier growth makes budgeting and long-term planning more predictable for buyers.

3. Wages are rising faster than home prices.This is a key factor. 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.”

Together, these trends are easing the same pressures that hurt affordability over the past few years. Fleming adds that while affordability remains a challenge, the market is finally benefiting from forces that support gradual improvement rather than further strain.

Economists now expect affordability to continue improving through 2026—not overnight, but steadily.

Where Affordability Is Improving First

The pace of improvement varies by location. Zillow projects that some markets could return to the 30% affordability threshold by the end of the year, while others are already seeing meaningful progress.

That doesn’t mean buyers need to wait—or relocate—to take advantage of these shifts. Many local markets are becoming more accessible sooner than expected. Understanding what’s happening in your specific area is key.

For the first time in years, homebuying affordability is beginning to ease—and that’s a meaningful shift.

Because this change isn’t happening evenly across all markets, working with a local real estate professional can help you understand what’s improving where you live. You may find that buying a home is more within reach than you thought.