3 Reasons Housing Affordability Is Improving in Fall 2025

For the past couple of years, many homebuyers have struggled to make the numbers work. Home prices surged, mortgage rates climbed, and affordability challenges forced buyers to hit the pause button. Maybe you were one of them.

Now, there’s encouraging news for anyone who has been waiting for the right time to re-enter the market. Housing affordability is showing signs of improvement this fall.

According to the latest data from Redfin, the typical monthly mortgage payment has dropped by nearly $290 compared to just a few months ago (see graph below).

So, what’s driving this shift? The cost of buying a home comes down to three factors:

• Mortgage rates

• Home prices

• Wages

And this fall, all three are finally moving in a more favorable direction for buyers.

. Mortgage Rates Are Trending Lower

Mortgage rates have eased compared to earlier this year. In May, average rates hovered near 7%. Now, they’re closer to 6.3% (see graph below).

That may not sound like a significant difference, but even a slight dip can have a substantial impact on your monthly payment. On a $400,000 mortgage, that lower rate could save you about $190 per month, a meaningful change for many buyers.

As Joel Kan, VP and Deputy Chief Economist at the Mortgage Bankers Association, noted on September 10th, explained:

“The downward rate movement spurred the strongest week of borrower demand since 2022 . . . Purchase applications increased to the highest level since July and continued to run more than 20 percent ahead of last year’s pace.”

2. Home Price Growth Has Moderated

After years of rapid appreciation, home price growth has slowed to low single digits. According to Odeta Kushi, Deputy Chief Economist at First American:

“National home price growth remains positive, but muted — low single digits — and we expect this trend to continue in the second half of the year.”

For buyers, this moderation is a welcome relief. More stable home prices make budgeting easier, and in some markets, prices have even dipped slightly—opening the door to more affordable opportunities.

3. Wages Are Outpacing Home Prices

According to the Bureau of Labor Statistics, wages have increased by nearly 4% year over year. Lawrence Yun, Chief Economist at NAR, explains:

“Wage growth is now comfortably outpacing home price growth, and buyers have more choices.”

That means your paycheck is stretching further than it did before. While the difference may not seem dramatic, every increase in purchasing power is beneficial in today’s market.

What This Means for You

With mortgage rates easing, slower home price growth, and stronger wages, buying a home this fall may be more achievable than it has been in years.

Redfin data already shows that the typical monthly mortgage payment is about $290 lower than it was earlier in 2025, proof that affordability is improving.

Bottom Line

If you’ve been waiting for the right time to buy a home, this fall’s housing market could be your opportunity. With mortgage rates easing, home prices stabilizing, and wages on the rise, affordability is showing real signs of improvement.

📲 Contact me today for a personalized home-buying strategy. I’ll re-run the numbers, review your budget, and help you determine if now is the right time to make your move. Whether you’re looking in Novi, Northville, South Lyon, or anywhere in Metro Detroit, I’m here to guide you every step of the way.