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This month we dive into affordability, buying a home in today’s market, housing inventory, home prices, and a sneak peek into what 2026 will hold.

The Elephant in the Room: Affordability

Affordability is probably the biggest concern in real estate right now. In fact, Bankrate just said, “On average, renting a home is cheaper than paying a mortgage in all 50 of the largest U.S. metros in 2025…” That’s the truth. However, it’s not as gloom and doom as it might seem for the real estate industry.

Let’s be honest, everybody needs housing – and most homes have a mortgage. You’re paying that mortgage for yourself, or you’re paying it for your landlord. Home prices are on the rise, but owning allows you to earn equity.

That equity can help offset the costs of homeownership that are unpredictable – like repairs. On the other hand, affordability is improving, with 48 of the top 50 markets improving over last month. We hope it is a short-term challenge.

Down Payment & Wealth Gain

Homeownership may be more within people’s reach than they realize. Most think it takes 20% down to buy a home, and that couldn’t be further from the truth.

To dive a little deeper, First American published a graphic looking at wealth gain over time.

While the wealth of a homeowner grows over time, the wealth of a renter is almost a mirror image. Homeowners gain equity and build wealth over time. To put it another way, Mark Fleming, the Chief Economist for First American said, “When the annual equity gain exceeds the other ownership costs, the home effectively ‘pays you’ to live there.”

If you bought a home back in 2006, that gained $181,000. If you didn't, that set you back $268,000 - that's including the monthly payment.

Buying Today

Daryl Fairweather, the Chief Economist from Redfin, said, “Prices keep climbing, but with lower mortgage rates and more inventory, buyers have an upper hand in negotiations. An uneasy economy and political tensions are making everyone uneasy, though, and local housing markets vary widely. Buyers serious about making offers should consult a local agent and be confident in their finances and future income.”

Furthermore, Zillow just published that affordability for home buyers has reached a three year high.

A recent realtor.com survey showed that renters feel optimistic about becoming homeowners right now. Probably one of the areas that is most lacking in this category is education. Where do you start when you’re interested in buying a home? What does the process look like? A great start would be to find homeownership classes or workshops available in your area, because many local brokerages want to be a voice for home ownership.

Housing Inventory & Home Prices

The growing number of homes on the market puts a downward pressure on home prices.

Buyers have more options now. Nationally, we have more than one million active listings which hasn’t happened since the end of 2019 – the last “normal year” in the housing market before the pandemic. The sort of plateau on the housing inventory in the last few months means the market normalizing. This will bring more people into the market, and you can see that by looking at the median days on market – the median amount of a time a home is listed for sale.

Not only is that returning back to where it was prior to the pandemic, but it is also starting to level off. Right now, it is taking about 63 days to sell a home. Homes simply are not selling in the first week like some may think. The market is shifting.

What does more homes on the market, combined with those homes taking a longer time to sell mean? It means we may begin to see more price cuts. As of October, about 20.2% of homes saw a price reduction. And, as we enter the quieter fall and winter months, fewer prospective buyers are shopping, which also points to more price reductions and/or sellers offering concessions to attract buyers.

New Construction

And this is more for new construction. The National Association of Home Builders said that 41% of builders reported price cuts last month – a record high post pandemic. The average price reduction was 6% in both October and November, and the use of incentives was 65% in September, October, and November.

Two out of three homebuilders are offering incentives. Right now, the largest home builder in the country, as of Q3, is devoting 14% of the sale of the home to concessions. 14%! Whether that is buying down the rate or making upgrades, that is a HUGE number.

Builders are trying to sell homes. They're willing to do what they can to keep things moving and that is certainly showing up in their sales.

 2026  Forecast

As we look forward to the final numbers for the last two months of this year, we look ahead an exciting projection for 2026: A 10% growth in transactions! This is great news for the industry, and will likely be prompted by a better mortgage rate environment.