Is Now the Right Time to Buy? 3 Signs Home Affordability Is Improving

The real estate market can feel like a roller coaster, with highs and lows affecting when you should consider buying a home. Recently, however, there are encouraging signs for potential buyers. Affordability is improving, which is great news for those who paused their home search. This shift is influenced by three key factors: mortgage rates, home prices, and wages. Let’s dive deeper into why now might be the right time to make your move.

1. Mortgage Rates Are Trending Down

After experiencing a period of high interest rates, the good news is that mortgage rates are finally trending downward. According to the 30-year fixed mortgage rate graph, the rates began to decrease from their peak in late 2023 and continue to show a promising decline. This trend allows buyers to lock in lower interest rates, reducing the overall cost of a mortgage and making homeownership more accessible.

2. Home Prices Are Moderating

If home prices felt out of reach last year, you'll be pleased to know that home prices are moderating. Year-over-year changes in home prices are becoming more stable. After a sharp increase in early 2022, the growth rate began to cool down in mid-2023 and has continued to stabilize throughout 2024. This moderation gives buyers more opportunities to find a home at a fair price, as the rapid appreciation has slowed.

3. Wages Are Rising Faster Than Usual

The third factor driving improved affordability is wages rising faster than usual. Analyzing the Index of Weekly Payrolls for workers in the private sector, wage growth has significantly outpaced historical trends since 2020. As wages increase, more buyers can comfortably afford mortgage payments, making homeownership a more realistic goal. This wage growth trend is a crucial element in closing the gap between what people earn and what they need to purchase a home.

Why Now Might Be the Perfect Time to Buy

If you hit pause on your home search due to rising costs, these three factors may mean it’s time to revisit the market. Lower mortgage rates, more moderate home prices, and higher wages are aligning to create more favorable conditions for buyers.

If you have been considering purchasing a home but are not sure if now is the time give our team a call! Our trusted real estate experts will be able to discuss your situation with you and help you decide if these new shifts in the market can help you purchase your next home!