​​Housing Affordability Improves But High Down Payments Keep Homeownership At 2019 Levels, Realtor.com Says

Core Insights - The U.S. housing market is showing signs of improvement for buyers as it enters 2026, although high down payments continue to pose challenges for many first-time buyers [1][4] Group 1: Market Conditions - The housing market is experiencing three major tailwinds: cooling interest rates, stabilizing home prices, and an increase in inventory [2] - The average 30-year fixed mortgage rate is currently just above 6%, a significant decrease from the peaks of 7% and higher seen in 2025 [3] - Pending home sales have increased by 3.3%, reaching their highest level in nearly three years, largely due to lower interest rates [4] Group 2: Buyer Challenges - Despite the reduction in monthly mortgage costs, the typical homebuyer now requires seven years to save for a standard down payment, an improvement from the 12-year timeline in 2022 but still double the prepandemic average [4] - The homeownership rate has recently fallen to 65%, the lowest level since 2019, indicating that buyers are struggling with the initial cash outlay despite being able to afford monthly payments [5] - Improving housing affordability, driven by lower mortgage rates and faster wage growth compared to home prices, is encouraging buyers to explore the market [6]