08/06/2026
Housing affordability continues to modestly improve
According to Hale’s presentation, the housing market is gradually becoming more balanced, giving buyers slightly more negotiating power than they had during the pandemic-era boom, as home prices have stagnated or declined in many markets.
Nationally, the median new home sales price, fell 2.7% year over year in June, as builders had to continue leveraging price discounts and incentives to drive sales. Meanwhile, the median existing-home sales price ticked up 1.8% year over year.
Due to stagnant home prices and rising incomes, the typical monthly mortgage payment for buyers, according to Realtor.com data, sits at $2,095 in 2026, down slightly from $2,135 last year. The median monthly payment on a median-priced home is also now below 30% of household income for the first time since 2022, signaling a gradually improving affordability picture.
As the affordability picture modestly improved, more first-time homebuyers returned to the market, with their share of purchases increasing this spring. However, affordability remains strained, with the typical home still consuming a larger share of household income than at almost any point in recent decades.
Demand for housing remains healthy, with household formation continuing and new-home sales holding up despite higher mortgage rates. However, millions of homeowners refinanced into historically low mortgage rates and are unwilling to sell, leaving very little existing inventory available. About 70% of homeowners have a mortgage rate of 5.0% or below, and many of them have no intention of moving until rates move lower.
