Housing News

Buying a Home Is the Most Affordable It’s Been in Almost Four Years

Buying a home is more affordable than it’s been in nearly four years, according to a new report.

Rising incomes, slower home price growth, and lower mortgage interest rates made it easier for more people to purchase homes in January, according to ICE Mortgage Technology.

The typical monthly mortgage payment dropped to $2,091 in January. That was down 7%, or about $164 a month, from January of last year.

“Even small reductions toward 6% [mortgage] rates can significantly boost affordability,” said Andy Walden, ICE’s head of mortgage and housing market research, in a statement.  

Households are now spending about 27.8% of their income on those mortgage payments. While that may still sound like a lot, it’s the lowest percentage of earnings going toward housing since March 2022.

Lower mortgage rates helped bring housing costs down. In January, mortgage rates averaged 6.10% for 30-year, fixed-rate loans, according to an analysis of Freddie Mac data. That was compared to 6.97% in January 2025.

Meanwhile, home prices only rose 0.6% last year, according to ICE. Nearly one in five newly constructed and existing homes underwent a price cut in 2025, according to Realtor.com.

However, affordability still isn’t back to what it was before the pandemic when home prices soared. Incomes would need to go up by about 15% to 20% for buyers to purchase homes at previous affordability levels.

Just 15 metropolitan areas, mostly in the Midwest, are back to normal housing affordability. These include Cleveland, Detroit, and Chicago.

Prices remained stronger in the Northeast, while they were down in more Southern and Western housing markets.

“Affordability remains structurally challenged, with home prices still elevated relative to incomes and meaningful differences emerging across regions and borrower segments,” Walden said in a statement.