For many homebuyers over the past couple of years, entering the market has felt daunting. Rapidly rising home prices and higher mortgage rates made it challenging to make the math work. If you paused your home search during that time, you’re not alone.
The good news? This fall, affordability is starting to improve, giving buyers reason to take another look.
Why? It comes down to three key factors:
- Mortgage rates
- Home prices
- Wages
All three are trending in a favorable direction, which means buying a home is becoming a bit more attainable — even if it’s not quite “easy” yet.
1. Mortgage Rates Are Dropping
Mortgage rates have eased from earlier highs. In May, the average rate hovered around 7%, and now it’s closer to 6.3%
Even a small shift can make a noticeable difference in your monthly payment. For example, on a $400,000 mortgage, that drop could save roughly $190 per month. That savings alone can make the difference between “just looking” and “making an offer.”
Joel Kan, VP and Deputy Chief Economist at the Mortgage Bankers Association, noted on September 10th:
“The downward rate movement spurred the strongest week of borrower demand since 2022 . . . Purchase applications increased to the highest level since July and continued to run more than 20 percent ahead of last year’s pace.”
2. Home Price Growth Is Slowing
After years of fast-rising home prices, growth is finally moderating. Odeta Kushi, Deputy Chief Economist at First American, explains:
“National home price growth remains positive, but muted — low single digits — and we expect this trend to continue in the second half of the year.”
Slower price increases give buyers more predictability in their budgets. In some areas, prices have even dipped slightly, opening opportunities for those looking to get into the market.
3. Wages Are Increasing
Income is rising too. The Bureau of Labor Statistics reports that wages are up nearly 4% year-over-year. Lawrence Yun, Chief Economist at NAR, points out:
“Wage growth is now comfortably outpacing home price growth, and buyers have more choices.”
Put simply, paychecks are increasing faster than home prices, which helps buyers stretch their budgets further. Every little bit counts in today’s market.
What This Means for Buyers
Lower rates, slower price growth, and stronger wages all combine to make homes a bit more affordable this fall. According to Redfin, the typical monthly mortgage payment is already about $290 lower than just a few months ago.
Even if affordability isn’t back to the levels it was pre-pandemic, these improvements make buying more achievable than it has been in recent months.
Bottom Line
If you’ve been wondering whether now is the right time to buy, it’s worth revisiting your options. We can review your budget, analyze how recent changes affect your buying power, and determine if this fall is the right moment to move from looking to owning.
