It’s Getting More Affordable To Buy a Home
Brooke Thedford • March 6, 2026
There’s finally a little good news for anyone who’s been priced out or sitting on the sidelines.
Buying a home is getting more affordable.
Monthly payments have started to come down, and the squeeze buyers have been feeling for the past few years is slowly loosening. Now, that doesn’t mean everyone can suddenly afford a home, but with how tough the market’s been, the improvement we’re seeing matters.
Affordability Is Finally Moving in the Right Direction
One of the best ways to see this shift is by looking at how much of a household’s income it takes to buy a home.
According to Zillow, housing is typically considered affordable when it takes 30% or less of your monthly income to cover your expenses. That includes your mortgage payment, taxes, insurance, and basic maintenance.
For the past few years, the math was well above that threshold, and it made buying a home unachievable for many. But now, we’re slowly moving back toward a balance. Zillow 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):
Now, we’re not all the way back to Zillow’s threshold of 30% of your income or less, so affordability is still tight. But things are trending in the right direction.
Why Affordability Is Improving
So, what’s driving the change? A lot of the focus lately has been on mortgage rates and how much they’ve come down over the course of the past year. But that’s not the only factor working in favor of buyers right now. Here are three trends benefiting buyers today:
1. Mortgage rates have eased. Rates are near their lowest level in more than three years, which helps lower monthly payments.
2. Home price growth has cooled. Prices aren’t falling nationally, but they’re growing much more slowly than they were a few years ago. That means buyers today aren’t facing the same sharp jumps in purchase prices, which helps keep monthly payments more manageable – and buying more predictable.
3. Wages are growing faster than home prices. This one matters a lot. 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.”
None of this makes buying cheap, but it does explain why the math is starting to work a little better for buyers than it did even a just a year ago. Put simply, the forces that hurt affordability over the past few years are finally easing. Fleming again explains it well:
“Affordability remains challenging, but for the first time in several years, the underlying forces are finally aligned toward gradual improvement. Mortgage rates may drift down only slowly, but income growth exceeding house price appreciation will provide a boost to house-buying power — even in a higher-rate world. Affordability won’t snap back overnight, but like a ship finally catching a steady tailwind, it’s now sailing in the right direction.”
These three factors combined are why economists expect affordability to keep improving in 2026.
Where Homes Are Becoming Affordable First
But how much is affordability really going to improve? In some places, noticeably. Zillow says some markets are expected to fall back under their affordability threshold (30% of your income or less) by the end of the year:
But that doesn’t mean you have to be in one of these markets or wait until year-end to buy. Other places are already seeing big improvements in affordability. So, talk to a local agent about what’s happening in your market. You may find you’re able to buy after all.
Bottom Line
For the first time in quite a while, affordability is easing. That’s a meaningful shift.
And because this improvement isn’t happening everywhere at the same speed, understanding what’s changing locally is what really makes a difference. If you want to see how these trends show up in your area, talk with a local real estate agent.
Would-be homebuyers aren’t sitting on the sidelines because they don’t want to buy. They’re sitting out because they think they can’t. And sometimes, it’s their credit score that’s holding them back.
In 2025, affordability was the best it’s been in 3 years. And experts agree the momentum will keep going in 2026. And that’s based on their analysis of the key factors shaping the housing market in the year ahead: mortgage rates, inventory, and home prices. Lower Mortgage Rates Are Already Here Mortgage rates have already come down from their peak. By some counts, they dropped by almost a full percentage point over the course of the last year. And that’s a big deal, even if it doesn’t sound like it. But how low will they go? And should you wait for them to come down more? Here’s your answer. Forecasts suggest they’ll stay pretty much where they are now and hover in the low 6% range throughout 2026 (see graph below):
The body content of your post goes here. To edit this text, click on it and delete this default text and start typing your own or paste your own from a different source.
And here’s where the mismatch is coming from. A few years ago, you could set any price and buyers would come running, no matter what the price tag said. Odds are, you’d still sell for over asking. But things are different now. Buyers have more options than they’ve had in years, so they can afford to be more selective. If your price feels even a little high to them, it’ll get overlooked in a heartbeat. And for the homeowners who had that happen, some end up pulling their listings instead of making a simple adjustment that could have changed everything. Which is a shame, honestly. Because a small price tweak is usually all it takes to bring buyers in and get the deal done. According to HousingWire , the average price cut right now is just 4%. Think about that. Other sellers are listing too high and giving up rather than dropping their price 4%. If they’d just started 4% lower, they may have already sold. So, before you list, talk to your agent about what’s working nearby. They’ll help you find the sweet spot that’s competitive, realistic, and still protecting your bottom line. And here’s the kicker. If you’ve been in your home for a while, your equity gives you room to set your list price more competitively and still come out way ahead. Unfortunately, those other sellers didn’t seem to realize that. 2. Don’t Rush the Process Another common misstep: expecting your house to sell in a weekend. Many sellers right now remember when homes sold in as little as hours – and they expect that to happen today. But in most markets, that’s not the reality anymore. It takes closer to 60 days to go from listed to sold, which is actually normal (see the gray in the graph below):
Affordability is still a challenge. There’s no question about that. But the market has given savvy buyers a head start. Mortgage rates have already come down over the past few months. And the drop we’ve seen saves you more than you’d think. How Much You’ve Already Saved, Without Realizing It Let’s put some real numbers to it. Rates peaked for the year in May when they inched above 7%. But since then, they’ve been slowly declining. Now, they’re sitting in the low 6s. And while that may not sound like a big deal, that change translates to real dollars. According to data coming out of Redfin, the typical monthly payment on a $400,000 home is already down almost $400 since May. That means if you’re buying a home now, you’re saving hundreds of dollars every month compared to what you would have been able to get earlier this spring. That’s real money that makes a real difference for buyers who paused their plans because they thought homeownership was out of reach. And while it may be tempting to wait even longer to see bigger savings, that’s a gamble that could cost you. Here’s why. Where Experts Say Rates Are Headed For starters, most experts say mortgage rates are likely to stay pretty much where we are today throughout 2026. So, there’s no guarantee we’ll see a rate much lower than what we have now. Only one expert forecaster is saying rates could fall into the upper 5s next year (see graph below):
Your house needs to stand out and grab attention from day one. That’s especially true when you consider why the number of homes for sale is up. Here’s how it works. Available inventory is a mix of: Active Listings: homes that have been sitting on the market, but haven’t sold yet New Listings: homes that were just put on the market Data from Realtor.com shows most of the inventory growth lately is actually from active listings that are staying on the market and taking longer to sell (see the graph below). The blue bars show active listings. These are the homes that are sitting month to month and not selling. The green bars are new listings, the homes that were just put on the market. And it’s clear there are fewer new listings compared to how many are staying on the market unsold.
Monthly Payments Are Coming Down One of the clearest signs of this shift is in monthly payments. The latest data from Redfin shows mortgage payments on a median-priced home are now $283 lower than they were just a few months ago (see graph below):
More Homes Will Sell With all of the affordability challenges at play over the past few years, many would-be movers pressed pause. But that pause button isn’t going to last forever. There are always people who need to move. And experts think more of them will start to act in 2026 (see graph below):
Why Builders Are Throwing in Perks There are more newly built homes for sale right now than there have been in years. And as a buyer, that can help you in two big ways. It gives you more options to choose from on the market, and it motivates builders to sell their inventory before they build more. That’s exactly why more buyers are scoring incentives like these: - Mortgage rate buydowns to shrink your monthly payment - Price cuts that make homeownership more attainable - Help with closing costs and even upgrades in some communities The best part is, a lot of builders are offering these perks right now. According to Zonda, nearly 6 out of 10 new home communities are doing incentives on to-be-built homes. And over 75% are doing the same for quick move-ins, which are homes that are already built and ready to move into. As real estate analyst Nick Gerli explains: “. . . builders are adjusting to the realities of the current housing market. They’ve cut prices 13 percent from peak, and are giving generous mortgage rate buydowns on top of that.” The big takeaway is: builders are motivated to sell. So, you could snag a lower price and maybe even a lower mortgage rate if you buy new. If you’ve been feeling priced out, these offers might be your way back in. You Have More Brand-New Options Than Normal Since there are more new homes on the market than usual, that gives you more options than you’ve had in years. Whether you’re looking for something turnkey or want to personalize a build, odds are there’s more available near you than you may realize. Even though the number of new homes for sale is up throughout the country, there are pockets where you have an even better chance to find a better price. According to Census data, here’s a high-level look at which parts of the country are seeing the biggest boost in newly built homes (see graph below):