US Real Estate Report : Mortgage Payments as Share of Median Property Owner Income Declined Significantly

Core Insights - The US real estate market is experiencing seasonal cooling after an unusually active fall, with price cuts from sellers returning to normal levels [1] - Affordability remains a challenge for home buyers, but improvements in mortgage payments and rising incomes are providing some relief [3] Market Trends - Mortgage payments decreased by over $100 a month, contributing to improved affordability for many households [1] - New listings from sellers fell nearly 30% month over month in November, marking the largest decline since at least 2018 [1] - Price cuts from sellers decreased from 26.9% of listings in October to 21.2% in November, aligning with seasonal norms [1] Inventory and Sales - Newly pending sales fell 18.5% month over month in November, although they remained 3% above the previous year [1] - Inventory levels increased as sellers outnumbered buyers during the spring and early summer, with a peak growth of 22.8% in March [1][2] Home Values - Typical home values nationwide increased by only 0.2% over the past year, with 53% of home values falling during the same period [2] - The majority of homes have gained value since their last sale, indicating a mixed performance in the market [2] Affordability Metrics - Monthly mortgage payments for a typical house represented 35.7% of median household income at the start of the year, declining to 32.6% in November, the lowest since August 2022 [3] - Zillow economists anticipate a continued decline in mortgage rates into 2026, which may support a rebound in home values and sales [3]