Housing News

Home Shoppers Have More Buying Power Than a Year Ago

Homebuyers have quietly caught a small win: Purchasing a home is still modestly easier than it was a year ago.

Mortgage rates may be higher than many would prefer, but homebuyers still have about 3% more purchasing power than they did at this time last year, according to the June 2026 ICE Mortgage Monitor report.

The monthly payment on an average-priced home was $48 lower year-over-year in May, according to the report.

The shift may not feel dramatic in a housing market where affordability remains stretched. Still, for buyers struggling to save for a down payment or qualify for a mortgage, even incremental improvements can make a difference.

“There’s a lot of noise in today’s housing market, but the good news is that buyers can afford more home today than they could a year ago,” said New American Funding Branch Manager Rau Hernández in Orlando, Fla. “Increased purchasing power and lower monthly payments are creating opportunities for families who may have thought they needed to keep waiting.”

Homebuyers can stretch their budgets a little further in 2026

For many buyers, particularly first-time homebuyers, affordability remains the biggest obstacle to purchasing a home in 2026. Elevated home prices and general affordability issues continue to squeeze budgets in many markets.

Still, a modest boost in purchasing power means some homebuyers may qualify for a slightly larger mortgage and face a lower monthly payment on a similarly priced home than they would have a year ago.

Purchasing the average-priced home now requires 29.8% of median household income, down from 31.6% a year ago, according to ICE.

That may not sound like a huge shift, but it represents a meaningful improvement for households already stretching their finances to buy a home.

Some housing markets are creating more opportunities for buyers

Housing conditions also look different depending on where buyers are shopping.

While Northeastern markets continue to post some of the strongest home-price gains in the country, several formerly red-hot Sun Belt metros have cooled. This creates more negotiating room for buyers in some areas.

Markets in states such as Florida, Texas, and Arizona have seen housing conditions soften compared with the frenzy of recent years.

More broadly, nearly 70% of major housing markets posted annual home-price gains in May, according to ICE, the largest share since July 2025.

Homebuyers still should not expect bargains

Affordability may be improving, but the 2026 housing market is still far from cheap.

Mortgage rates remain elevated compared with the record lows of the pandemic era, and home prices continue to rise in many regions. Property taxes, insurance premiums, and everyday costs are also adding pressure to household budgets.

Still, buyers who stay flexible, expand their home search, and work closely with a lender may find more opportunities than they would have a year ago.

For many Americans hoping to buy a home in 2026, the housing market may not be easy, but it is becoming a bit more manageable.

Smart mortgage strategies can help buyers maximize affordability

Small affordability gains can go further when paired with the right mortgage strategy.

Homebuyers looking to stretch their budgets may want to explore options such as mortgage rate buydowns, adjustable-rate mortgages, or down payment assistance programs that can lower upfront costs or reduce monthly payments.

Some buyers are also purchasing smaller homes and are planning to refinance when mortgage rates decline in the future.

“Don’t make decisions based on headlines alone,” said Hernández. “Sit down with a trusted mortgage professional, review your options, and determine what makes sense for your specific situation. You may be closer to homeownership than you think.”

Rau Hernández NMLS # 619301