Before we get into the more positive outlook for 2026 home sales, there are a few important statistics that help put today’s housing market into perspective.

How Mortgage Affordability Has Changed

In 2019, the typical mortgage payment accounted for about 21% of household income. Today, that number has climbed to roughly 30%, which is near the highest ratio most banks will approve for a mortgage.

So what would it take to return to the more affordable 2019 level of 21%?

  • Household incomes rising by 56% to $132,000 from the current average of $84,800.
  • Mortgage rates falling to 2.65% from today’s average rate of around 6.15%. There are some rates available today that are already lower than this average.
  • Home prices decreasing by 35% to a median price of $273,000 from the current median of $418,000.
  • Or a realistic combination of all three factors.

What This Tells Us About Today’s Market

These numbers clearly demonstrate how unaffordable home purchasing has become. None of these scenarios is likely to occur on its own in the near future. However, the good news is that a combination of these factors can meaningfully improve affordability.

Mortgage rates are expected to remain near current levels, but there are already lower-rate options available that help reduce monthly payments. Income growth is expected to be solid this year, and home prices are beginning to decline, particularly in certain regions.

As mentioned earlier, there are additional forces at work in the housing market that should further improve affordability. We will explore those in more detail in our upcoming article focused on the 2026 outlook.

Other Surprising Housing Market Statistics

  • The share of first-time homebuyers has declined by 50% since 2007, the year before the Great Recession.
  • Only 50% of current homebuyers have children.
  • Delisting reached an all-time high of 28% by the end of 2025.
  • Of the sellers who delisted their homes, 47% purchased their homes within the last five years.

Looking Ahead

Next, we move on to the truly positive developments. A more optimistic home sales outlook is taking shape, and 2026 is beginning to look much rosier.