Mortgage rates hit a two-year low in September, making more homes accessible to buyers. At that time, a middle-income household could afford 27.3% of homes for sale, the highest share since February 2023. In October, across all of the 50 largest U.S. metro areas, affordability also improved compared with the previous year.
However, rising mortgage rates in recent weeks have likely discouraged many potential buyers, according to real estate marketing platform Zillow. With trends surrounding affordability continuing to change month by month, it's unclear what exactly the next few months have in store.
Affordability remains the top challenge for home buyers, and volatile mortgage rates are making a big impact on what home shoppers can afford. In May, when mortgage rates averaged 7.06%, a household making the median U.S. income could have comfortably afforded 22.7% of homes listed for sale across the country. About 75,000 additional homes on the market were affordable to a median-income household in September, when mortgage rates fell to an average of 6.18%. Read more
