For several years, aspiring homeowners have faced one of the most challenging markets in recent memory. Rapidly rising prices, elevated mortgage rates, and limited inventory created a perfect storm that pushed many would‑be buyers to the sidelines. But after a long stretch of discouraging conditions, the tide is beginning to turn.

Affordability is gradually improving, and while the shift is not dramatic or universal, it is meaningful. For the first time in quite a while, the numbers are moving in a direction that gives buyers a bit more breathing room—and a bit more hope.

This doesn’t mean the market has suddenly become inexpensive or that every household will now find homeownership within reach. But the pressure that has defined the past few years is easing, and that change matters.

A Clear Shift: Homeownership Is Taking Up Less of the Typical Household Budget

One of the most reliable ways to measure affordability is by looking at the share of income a household must devote to housing costs. Zillow uses a benchmark that considers housing affordable when the total monthly expense—including mortgage payments, taxes, insurance, and basic upkeep—requires 30% or less of a household’s income.

During the height of the affordability crunch, that percentage climbed well above the 30% threshold in many markets. Buyers were forced to stretch their budgets to uncomfortable levels, and many simply couldn’t make the math work.

Today, that picture is improving. Zillow’s latest research shows that the portion of income needed to purchase a typical home has begun to decline. While affordability has not yet returned to the ideal 30% level, the trend is unmistakably moving in the right direction. After years of worsening conditions, even incremental progress is a welcome development.

This shift signals that the market is slowly rebalancing. Buyers who previously felt locked out may find that the numbers now look a bit more manageable than they did just a year or two ago.

What’s Behind the Improvement? Three Key Forces Are Working in Buyers’ Favor

Affordability is influenced by several interconnected factors, and right now, three of the most important ones are finally aligning in a way that benefits buyers. These forces don’t eliminate the challenges of today’s market, but together they help explain why purchasing a home is becoming more feasible.

1. Mortgage Rates Have Eased from Their Highs

Mortgage rates have been one of the biggest obstacles for buyers in recent years. After climbing rapidly, they reached levels not seen in decades, dramatically increasing monthly payments and reducing purchasing power.

But over the past year, rates have retreated from their peak. They are now hovering near their lowest point in more than three years. Even a modest decline in rates can have a significant impact on affordability, lowering monthly payments and expanding the range of homes a buyer can consider.

Lower rates don’t solve everything, but they do help soften the financial burden that has kept so many buyers on the sidelines.

2. Home Price Growth Has Slowed Considerably

It’s important to note that home prices are not falling on a national scale. However, the pace at which they are rising has cooled substantially compared to the rapid appreciation seen during the pandemic-era housing boom.

This moderation matters. When prices rise more slowly, buyers face fewer sudden jumps in the cost of entry. It also makes the market more predictable, allowing buyers to plan with greater confidence and reducing the risk of being priced out while searching for a home.

Slower price growth doesn’t make homes cheap, but it does make the path to homeownership more stable and less volatile.

3. Wages Are Growing Faster Than Home Prices

Perhaps the most encouraging trend is that incomes are rising at a faster rate than home prices. This dynamic increases what economists call “house-buying power.”

Mark Fleming, Chief Economist at First American, explains the significance of this shift: “When income growth exceeds house price growth, house-buying power improves—even if mortgage rates don’t decline meaningfully.”

This is a crucial point. Even in a world where rates remain higher than what buyers were used to in the past decade, stronger wage growth can help close the gap. As incomes rise, households can devote more resources to housing without stretching their budgets as thinly as before.

Fleming also emphasizes that while affordability is still a challenge, the underlying trends are finally supportive rather than restrictive: “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.”

In other words, the market is not suddenly easy—but it is becoming easier.

Why This Matters: The Market Is Becoming More Balanced

The combination of easing rates, slower price growth, and rising incomes is helping to rebalance a market that has been heavily tilted against buyers for years. These changes don’t erase the difficulties of high prices or limited inventory, but they do create a more favorable environment for those who have been waiting for conditions to improve.

Economists expect this positive momentum to continue into 2026. While no one anticipates a dramatic drop in prices or a return to the ultra-low mortgage rates of the past decade, the gradual improvement in affordability is expected to persist.

This steady progress is important. Housing markets rarely shift overnight. Instead, they evolve through a series of incremental changes that, over time, reshape the landscape for buyers and sellers alike.

Where Affordability Is Improving the Fastest

Affordability is not improving at the same pace everywhere. Some markets are seeing more pronounced gains than others, and a few are on track to fall back under the 30% affordability threshold by the end of the year, according to Zillow’s projections.

These markets tend to share certain characteristics—such as slower price growth, stronger wage gains, or more available inventory—that help bring the cost of homeownership back into a more balanced range.

However, buyers don’t need to live in one of these standout markets to benefit. Many areas across the country are already experiencing meaningful improvements, even if they haven’t yet crossed the 30% threshold.

This is where local expertise becomes invaluable. Real estate is inherently regional, and national trends don’t always reflect what’s happening in a specific neighborhood or city. A local real estate professional can help buyers understand how these broader shifts are playing out in their area and whether now might be a good time to re-enter the market.

What Buyers Should Keep in Mind Right Now

Even with improving conditions, buying a home remains a major financial decision. But for those who have been waiting for a more favorable moment, the current environment offers several advantages worth considering.

Monthly Payments Are Becoming More Manageable

Lower mortgage rates and slower price growth mean that monthly payments are not rising as quickly as they were in recent years. For many buyers, this is the difference between stretching too far and finding a comfortable payment.

The Market Is Less Volatile

The rapid price swings of the past few years made it difficult for buyers to plan. Today’s more stable environment allows for more thoughtful decision-making and reduces the pressure to rush into a purchase.

Buying Power Is Increasing

With incomes rising faster than home prices, buyers may find they can afford more than they could just a year ago. This doesn’t mean stretching beyond a comfortable budget, but it does mean having more options within that budget.

Opportunities Vary by Location

Because affordability is improving unevenly, some markets offer more favorable conditions than others. Buyers who explore their local market may discover opportunities they didn’t expect.

The Bottom Line: The Market Is Finally Moving in a Better Direction

After several years of intense pressure, the housing market is showing real signs of relief for buyers. Affordability is still a challenge, but it is improving—and that improvement is meaningful.

The combination of easing mortgage rates, slower home price growth, and rising incomes is creating a more balanced environment. While the shift is gradual, it represents a turning point that many buyers have been waiting for.

Because these changes are unfolding at different speeds across the country, understanding local conditions is essential. A knowledgeable real estate agent can help buyers interpret what these trends mean for their specific market and determine whether now is the right time to take the next step.

For the first time in quite a while, the housing market is becoming more accessible. And for buyers who have been patiently waiting, that’s very good news.