Based on early 2026 data, homeownership affordability is showing signs of improvement after years of decline, not because home prices are crashing, but because multiple economic factors are finally moving in buyers’ favor.
Key national trends include:
- Mortgage rates easing into the low-6% range, down from 2025 highs above 7%
- Monthly mortgage payments are falling roughly 8.4% year over year
- Income growth is beginning to outpace home-price growth
- Housing affordability has been improving for seven consecutive months, according to industry indexes
- Zillow projects affordability improvements in most major U.S. markets this year.
The result: buyers are slowly regaining purchasing power.
Mortgage Rates Have Stabilized
Mortgage rates surged after the pandemic but have recently settled near 6%, their lowest levels in over three years. Lower borrowing costs directly reduce monthly payments, making homes more attainable even when prices remain steady.
Monthly Payments Are Actually Declining
Even though home prices haven’t dropped dramatically, affordability is improving as financing costs ease. The monthly payment to purchase the average-priced home fell by approximately $164 year over year in early January 2026.
Income Growth Is Catching Up
Affordability isn’t returning overnight, but conditions are improving steadily. Many economists describe 2026 as the beginning of a long housing market reset toward normal conditions.
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.
More Inventory Means More Negotiation Power
The Big Picture
Separate what you need from what you want.
Must-haves might include:
● Location or school district
● Number of bedrooms
● Commute time
Nice-to-haves can include cosmetic features you can upgrade later. This keeps emotions in check and decisions strategic.