Affordability Improves, Down Payments Remain a Challenge
Mortgage rates have moved lower, home prices have cooled, and more listings are finally coming to market. Taken together, those shifts are creating better affordability conditions for today’s buyers than we’ve seen in some time. For many first-time buyers, though, one challenge still looms larger than the rest: saving for a down payment.
On a national level, home prices have largely leveled out compared to last year. Daily pricing data shows values hovering just slightly above where they were twelve months ago, after briefly dipping into negative territory earlier this fall. In real terms, price growth has lagged inflation, which means purchasing power is no longer being eroded as quickly as it was during the peak years of the market.
Mortgage rates are also providing meaningful relief. The average 30-year fixed rate has fallen into the low 6% range, down significantly from the 7% territory buyers were facing earlier this year. That drop has a real impact on monthly payments. On a typical-priced home, buyers today are often spending hundreds less per month than they would have just a year ago, even before factoring in any price adjustments.
Despite those improvements, the path to homeownership is still challenging for many first-time buyers. Saving for a down payment remains the biggest obstacle. While the time needed to save has come down from recent highs, it is still far longer than it was before the pandemic. Lower household savings rates and higher everyday expenses continue to slow progress, even as loan affordability improves.
Inventory, however, is quietly changing the tone of the market. The number of active listings is meaningfully higher than last year, giving buyers more options and reducing the pressure that defined the last few cycles. While supply has not fully returned to pre-pandemic norms, it is moving in a healthier direction.
The takeaway is not that the market has suddenly become easy, but that the math is improving. For buyers who plan carefully and understand their options, today’s environment offers opportunities that simply did not exist during the height of the market.
If you’re thinking about buying your first home, making a move, or positioning your current property strategically, I’m always happy to walk through scenarios, discuss timing, or help you build a plan that makes sense for your goals! Reach out anytime and let’s talk through what’s possible.
