Almost every affordability conversation of the last four years has been a conversation about mortgage rates. Rates went up, affordability collapsed. Rates tick down, everyone exhales. It became the only variable anyone watched.
That framing is starting to miss the real story.
Recent industry reporting points to something that has not happened in a sustained way since the aftermath of the financial crisis: wage growth is running ahead of home-price growth. Projections cited this year generally put income gains in the mid-three to four percent range while home prices grow somewhere in the low single digits. In roughly two-thirds of U.S. counties, wages have outpaced price growth over the past year.
Meanwhile the 30-year fixed rate has spent August essentially flat, hovering in the mid-six percent range week after week, slightly above where it sat a year ago. Rates have not rescued anyone. Something else has been doing the work.
Why the income side matters more than it sounds
Rate movements are fast, loud and reversible. A quarter-point drop makes headlines and can vanish in three weeks. Income growth relative to prices is slow, quiet and cumulative. It compounds. It also does not require anyone to guess correctly about the Federal Reserve.
Put differently: a market where prices grow slower than paychecks is a market that gets more accessible every year it continues, regardless of what rates do.
The honest caveat
Improving is not the same as affordable. The national price-to-income ratio has eased from its peak but remains well above where it sat in the late 2010s. A gap that took years to open does not close in a couple of quarters. Anyone telling you affordability is solved is selling something.
What to actually do with this
If you are buying: stop waiting for a rate number. If your income is stable, your debt is manageable and you plan to stay put for several years, the math on buying is more about your situation than about a headline. Get a real preapproval and see where you actually stand.
If you are selling: modest, steady price growth is a healthy environment, but it is not a green light to price ahead of the market. Buyers have more choice and more patience than they did in 2021.
If you are in Houston: national averages describe a country, not a neighborhood. Our submarkets diverge sharply from each other, let alone from a national figure.
This is general educational information, not financial advice. Your lender and financial advisor should weigh in on your specific numbers.
If you want to know what these trends actually look like in your neighborhood — Memorial, Katy, Cypress, the Heights, EaDo, Sugar Land or anywhere in between — reach out and we will pull real, current, local data for you.
———
The Audra O’Neal Team | ONTX Realty Partners
Call or Text: 281-972-8200
Email: ONealTeamRocks@gmail.com
Web: http://www.ONealTeamRocks.com
#AudraONealTeam #SellingHomesBuildingDreams #FridayIsMyMonday #HousingMarket #HoustonRealEstate #Affordability #MortgageRates
