Over the last couple of years, many buyers felt locked out of the market. Higher home prices and rising mortgage rates stretched budgets thin, forcing some people to put their search on hold.
This fall, though, there are encouraging signs. Conditions are shifting in ways that make buying a home a little more manageable.
Recent numbers from Redfin show the typical monthly mortgage payment is down by nearly $290 compared to just a few months ago (see graph below):
So, what’s driving this change? The affordability of a home largely depends on three things:
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Mortgage rates
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Home prices
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Your income
Right now, each of these factors is moving in a direction that helps buyers. While it’s not suddenly “cheap” to buy, it’s less challenging than it was earlier this year.
1. Mortgage Rates
Rates have pulled back since spring. In May, they averaged about 7%. Today, they’re closer to 6.3% (see graph below):
That difference may look small, but even a modest shift matters. On a $400,000 mortgage, today’s rate could lower your payment by roughly $190 each month compared to when rates were 7%.
For some, that savings is just enough to make buying realistic again. Joel Kan, VP and Deputy Chief Economist at the Mortgage Bankers Association (MBA), noted on September 10:
“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 Prices
After years of rapid gains, prices are no longer climbing at the same pace. 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.”
That moderation makes it easier to plan a budget. And in some areas, prices have even softened slightly, giving buyers more room to find an option that fits their needs.
3. Wages
Paychecks are also growing. According to the Bureau of Labor Statistics, wages are up nearly 4% annually. Lawrence Yun, Chief Economist at NAR, says:
“Wage growth is now comfortably outpacing home price growth, and buyers have more choices.”
That means income is rising faster than home prices for now, which helps ease the strain. It’s not a dramatic gap, but it’s enough to improve affordability little by little.
What This Means for You
When you put it all together—lower rates, slower price growth, and stronger wages—the numbers may finally start to work in your favor.
Redfin’s data already shows that typical monthly payments are nearly $290 less than they were earlier this year. While buying is still a financial stretch, it’s slightly easier than it was just a few months back.
Bottom Line
If you’ve been on the sidelines, now might be the right moment to revisit your plans.
Let’s go over your budget, look at what’s changed, and see if this fall could be the season you move from searching to settling into your next home.
Vesta Schneider
Realtor®
Luxury Homes | Relocation | Investments
Keller Williams Realty McKinney
📞 302-530-7314
📧 vestaschneider@yahoo.com
