The Truth About Housing Affordability in Today’s Real Estate Market

Let's be real with each other for a second about affordability. Because you deserve someone who will be honest and transparent about what’s going on, especially if you’ve got a move on your mind.

Here’s the full picture of what’s happening and why. The good – and the bad. So, you know what it truly means for your move. Because while rates are certainly a big part of affordability, they’re not the only factor at play.

Why Mortgage Rates Have Been Rising Again

After a year or more of rates trending down, they’ve started to climb again. And, if you’re looking to buy, that’s not what you want to see. But it has happened. And here’s why.

Uncertainty is the enemy of mortgage rates.

And with lingering global uncertainty, ongoing tensions in the Middle East, and inflation refusing to fully cool off, there’s a lot that’s having an effect on rates. Colin Robertson, Founder of The Truth About Mortgage, put it plainly:

"You can't have $100 a barrel oil and not expect inflation to rise, which translates to higher bond yields and mortgage rates."

Take a look at the graph below. It uses data from Mortgage News Daily to show just how much all of those factors have had an impact:

It’s a pretty sharp contrast from where we’ve been, in a relatively short window. And it's probably making you wonder: Should I just wait this out? Will rates fall when the uncertainty eases?

It's possible. But it all depends on how the ongoing geopolitical conflict plays out and whether inflation continues to run hot afterwards – and for how long.

Should You Wait for Lower Mortgage Rates?

Many experts believe mortgage rates may not decline significantly until those conditions improve. And even when that does happen, many housing and mortgage market experts believe rates may not fall dramatically lower – maybe in the low to mid-6s. That’s an important part of today’s housing market to understand.

So, should you wait for lower rates? Many experts believe that if you can comfortably afford to buy and find a home that fits your needs, it may still make sense to move forward. Because no one knows for sure when rates will start to come back down – and how long do you really want to put your life on hold?

Wages Are Growing Faster Than Home Prices

You've probably heard that inflation is making everything more expensive, and there's no shortage of headlines about the cost-of-living outpacing paychecks. It's a legitimate concern. And maybe you’re feeling the pinch yourself. But here's what doesn't make the headlines. It's not all bad news.

Data from the Federal Reserve Bank of Atlanta and Redfin shows wages have actually been growing faster than home prices.

• Recently, wages have been increasing at around 4% year-over-year.
• And home price growth is closer to 2% year-over-year.

As a buyer, you want your income to rise faster than prices because that helps make your purchase more manageable financially, and it quietly chips away at the affordability challenge over time. That’s exactly what we’re seeing lately. And every little bit is going to help.

A big reason wages have been gaining ground on home prices? Home prices have actually stayed pretty steady.

Existing Home Prices Continue To Show Stability

Check out the graph below. It shows home price data from the National Association of Realtors (NAR) over the past 4 years. Notice anything? There's been no dramatic runup, and no crash either. Just relative stability and slow growth:

Why More Housing Inventory Is Helping Buyers

Part of what's keeping prices this stable is that buyers finally have more choices. That means less competition, more negotiating power, and more time to find the home that actually fits your life, not just the one you had to grab before someone else did.

And that gives you a chance to hopefully find something that works for your budget, even with today’s rates. At the same time, you're not losing ground pricewise while you take time to make a careful decision.

Bottom Line on Home Affordability in 2026

Yes, rates have been volatile, and global instability is keeping them from settling down anytime soon. There’s no sugar coating that. But the full picture of affordability is more nuanced than the headlines suggest.

If you’re thinking about buying or selling in today’s market, understanding your numbers and local market conditions matters more than ever.

Whether you're searching for Homes for Sale in North San Diego County, exploring Carlsbad Homes for Sale, Vista Homes for Sale, or looking for guidance from an experienced Escondido real estate agent, having the right strategy can make all the difference.

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Frequently Asked Questions About Housing Affordability in 2026

Are mortgage rates expected to go down in 2026?

Mortgage rates are influenced by several factors, including inflation, economic conditions, and bond market activity. While many housing and mortgage market experts believe rates could improve if inflation continues to cool, no one can predict exactly when or how much mortgage rates may change.

Is now a good time to buy a home?

The right time to buy a home depends on your financial situation, long-term goals, and local market conditions. Even with today’s mortgage rates, some buyers are finding more opportunities due to increased housing inventory, slower home price growth, and greater negotiating power in certain markets.

Are home prices still rising?

Home price trends can vary by city and neighborhood. In many markets, home prices have shown slower and more stable growth compared to the rapid increases seen in previous years. Factors like inventory levels, buyer demand, and mortgage rates can all influence local housing prices over time.

About the Realtor

Patricia Villanueba is a real estate professional helping buyers and sellers navigate the North County San Diego real estate market, including Escondido, Carlsbad, Vista, San Marcos, Oceanside, and surrounding communities. She shares local housing market insights, mortgage trends, and real estate updates to help consumers make informed decisions in today’s market.

Disclaimer: This article is for informational purposes only and should not be considered financial, mortgage, or legal advice. Housing market conditions, mortgage rates, and home values can change over time and may vary by location and individual circumstances. Buyers and sellers should consult with qualified professionals regarding their specific real estate and financial situation.