Will Home Affordability Improve this 2026? What Buyers Can Actually Control

If you have been asking, “Will home affordability finally improve this 2026?” you are not alone. It is one of the most common questions I hear right now.

The honest answer is yes, it can improve, but it will not feel like a night and day shift for every buyer. Affordability is a combination of income, home prices, and the cost of financing, plus one factor that is easy to overlook: negotiation power.

Below is a simple way to think about what is changing, what is not, and how buyers can win even if the headlines stay mixed.

1) Wages are rising, but the local market matters

Income growth is real. One widely watched measure of wages and benefits, the Employment Cost Index from the U.S. Bureau of Labor Statistics, shows wage and salary growth in recent data staying positive year over year. Source: https://www.bls.gov Bureau of Labor Statistics

But affordability is not national in your day to day life. It is local. In many markets, home prices have still been outpacing paychecks over time, and that gap is what buyers feel.

The good news is that price growth has cooled. For example, the Federal Housing Finance Agency reported U.S. house prices were up 1.7% from October 2024 to October 2025, which is a much slower pace than the rapid gains earlier in the decade. Source: https://www.fhfa.gov FHFA.gov+1

Takeaway: affordability may improve gradually if income keeps rising and price growth stays slower, but the outcome depends on your specific market and price point.

2) Inflation is the hinge for monthly payment relief

Most buyers do not buy a home based on price alone. They buy a monthly payment. That is why inflation trends matter.

Inflation measures like CPI help explain why borrowing costs have been volatile. In the latest BLS CPI data, the 12 month change for all items was reported around the high 2% range. Source: https://www.bls.gov Bureau of Labor Statistics+1

When inflation cools, interest rates across the economy often have room to ease over time. The Federal Reserve’s projections and minutes frequently discuss the inflation outlook and the expected path back toward longer run goals. Source: https://www.federalreserve.gov Federal Reserve+1

Takeaway: 2026 affordability can improve if inflation continues to settle, but it is safer to plan for a range of outcomes rather than betting on one specific rate number.

3) The biggest shift may be negotiation power, not sticker price

This is the part most buyers miss.

Even if prices and rates do not dramatically change, terms can. When inventory is higher and homes sit longer, sellers often become more flexible with:

• Seller credits toward closing costs

• Temporary buy downs

• Repairs or price reductions

• Concessions that reduce out of pocket cash at closing

We have already seen signs of inventory improving. The National Association of Realtors reported 4.2 months of inventory in its November 2025 existing home sales snapshot. Source: https://www.nar.realtor NAR+1

NAR also publishes a Housing Affordability Index that tracks how the typical family’s income compares to the income needed to qualify for a median priced home. That index has shown improvement recently, illustrating how affordability can move even when the market feels tight. Source: https://www.nar.realtor NAR+1

Takeaway: buyers may get more leverage in 2026, and leverage often turns into better terms.

4) How to think like a “terms first” buyer in 2026

If you want to improve affordability, focus on what you can control:

Get clarity on your payment range
Price is a headline. Payment is reality. Start with the monthly number you want, then work backward.

Use concessions strategically
Seller credits can lower cash to close, fund a temporary buy down, or help with targeted repairs.

Compare scenarios, not opinions
Run options like:

• Different down payments

• Different price points

• Credit and concession strategies

• Timing choices if you are balancing lease, savings, or job changes

Plan early, so you can move fast
When you find the right home, preparation gives you leverage. You can negotiate from a position of strength.

Bottom line

Will affordability improve in 2026? It can, especially if wage growth continues, price growth stays slower, and inflation remains contained. But the biggest opportunity may be terms: more inventory often leads to more negotiation power, and that can translate into real savings.

If you want, DM me and I will run a quick scenario for your exact numbers. No pressure, just real math.

Sources (general sites):
https://www.bls.gov Bureau of Labor Statistics+1
https://www.fhfa.gov FHFA.gov
https://www.federalreserve.gov Federal Reserve+1
https://www.nar.realtor NAR+1
https://fred.stlouisfed.org FRED