US Housing Affordability 2026: What Florida Buyers Should Expect
US Housing Affordability 2026 is on track to improve for the first time since the pandemic pushed many borrowers out of the market. After years of rising prices, tight supply, and higher interest rates, the market is finally showing early signs of shifting in favor of homebuyers as 2026 approaches. The improvements will be gradual, but the direction is positive, and buyers in Florida should understand what this means for their next move.
Housing costs remain above pre-COVID levels, but according to First American’s Real House Price Index, affordability improved year-over-year for seven straight months through September 2025. This is the longest stretch of improvement since 2019–2020. While the market is still far from pre-pandemic norms, a meaningful trend is starting to form.
US Housing Affordability 2026 and the Role of Income Growth
The biggest driver of improving US Housing Affordability 2026 is the relationship between income and home prices. Mark Fleming, chief economist at First American, said the key shift is simple: household income is rising faster than house prices.
Expected household income growth for 2026 is about 2.8 percent, based on the New York Fed’s Survey of Consumer Expectations. When income rises faster than prices, a buyer’s purchasing power increases. This remains true even if mortgage rates decline slowly or stay higher for longer.
Fleming said this income trend is expected to create a roughly 3 percent improvement in affordability from late 2025 through the end of 2026. This would bring affordability back to levels last seen in mid-2022. For Florida homebuyers, especially in fast-growing areas like Jacksonville, St. Augustine, St. Johns County, and Tallahassee, this shift helps create options where affordability has been strained since 2021.
US Housing Affordability 2026 Supported by Slowing Price Growth
Outside forecasters support this outlook. Fannie Mae expects the 30-year fixed mortgage rate to average around 6.2 percent in early 2026 and fall below 6 percent by year-end. At the same time, home price growth is projected to slow to about 1.3 percent in 2026. That is a major slowdown from the price jumps of 2024 and 2025.
For Florida buyers, price growth cooling is an important factor. Florida’s inventory remains limited, but more homes are hitting the market with slight price reductions, especially in higher-cost areas such as St. Johns County, Nocatee, and portions of Miami-Dade. Slower appreciation helps buyers regain ground that has been lost over several years of fast gains.
Odeta Kushi, deputy chief economist at First American, noted that this is the slowest pace of price appreciation since 2012. If this cooling continues into 2026, affordability should keep rising, especially in markets where sellers adjust prices to draw buyers back into the market.
US Housing Affordability 2026 and the Reality of Higher Rates
Even with better income growth and slowing price appreciation, Fleming cautioned that borrowers should not expect a rapid shift. Mortgage rates remain elevated historically. Supply is still tight in many cities. And affordability will improve slowly—not dramatically.
He explained that the market is similar to a ship that has finally caught a tailwind. It will not turn quickly, but it is moving in the right direction for the first time in years.
For Florida borrowers, this means planning ahead. Buyers should expect a higher-rate environment but with growing buying power over time. Better income, slower price gains, and slow-declining rates help open the door for those who were pushed out earlier.
US Housing Affordability 2026 and What It Means for Lenders
Fleming said the 3 percent affordability improvement will not be enough to unleash a major wave of demand by itself. But it does mark a turning point. Since 2020, affordability had been eroding almost nonstop. That pressure is finally easing.
This matters for lenders, originators, and mortgage brokers across Florida. As affordability improves, even slightly, well-qualified buyers begin returning to the market. These borrowers may bring more income or savings to strengthen their applications. With strong preparation, they are positioned to take advantage of improved conditions long before the broader market reacts.
This early movement can help increase loan volume in an industry where activity has slowed. The borrowers who prepare now—before conditions shift further—will be in the best position to secure competitive terms.
US Housing Affordability 2026 and the Florida Advantage
Florida has unique advantages that tie directly into affordability improvements:
• Population growth continues
• More new construction is underway
• Wages in several regions are rising faster than national averages
• Some markets are stabilizing faster than others
• Active inventory is increasing in key counties
Areas like Jacksonville, Yulee, St. Augustine, Palm Coast, Tallahassee, and Orlando are already seeing early signs of price adjustment. Sellers are more open to negotiation than they were during the peak pandemic years. More active listings mean buyers have better odds of finding a property within budget.
For buyers who have been waiting for the right moment, the early stages of 2026 may offer the best balance of price stability, income strength, and slightly lower mortgage rates.
Local CTAs (Conversion-Focused)
If you want to understand how US Housing Affordability 2026 affects your buying power in Florida, call or text me today. I can break down the numbers, review your income changes, and show you exactly how much home you can qualify for under the newest affordability outlook. Whether you are buying in Jacksonville, St. Augustine, St. Johns County, or anywhere in Florida, I am here to help you prepare for the market shift ahead.
Nathan Young
North Star Mortgage Network, Inc.
NMLS #325206
904-613-7700 (call or text)
Your best interest is my principal concern.
