U.S. Housing Affordability Shows Modest Gains
With mortgage rates easing and home prices slowing, affordability has increased 3.1% YOY across the U.S. However, conditions remain well below pre-pandemic norms.
NEW YORK – After years of challenges, housing affordability in the United States is showing slight improvement. Mortgage rates, which peaked near 8% in 2023, have eased to around 6.5%, while home price growth is flattening or declining in many metros.
A First American analysis found a 3.1% year-over-year improvement in affordability, marking five consecutive months of annual gains.
"For prospective buyers who have been waiting on the sidelines, the housing market is finally starting to listen," Mark Fleming, chief economist at First American, said of the shift.
More than half of major metros saw prices fall or grow less than 1% annually, with Austin and San Francisco posting the steepest declines. Rising incomes are also helping, outpacing home-price gains in about 70% of markets.
Still, affordability remains more than 70% worse than the pre-pandemic average, and Redfin reports the U.S. homeownership has stopped growing for the first time in nearly a decade.
Economists caution that while conditions may be easing, a full return to widespread affordability will take time and further income growth, slower appreciation and lower rates.
Source: Fortune (09/03/25) Lake, Sydney
© Copyright 2025 Smithbucklin