Spring Homebuying With Rates Below 6% & Prices Below $400k
With mortgage rates below 6% and median home prices $397k to $414k, you can buy a home with 5% down if you make $110k to $114k.
Spring homebuying season will be more affordable for buyers and opportunistic for sellers. Yesterday, Mortgage News Daily reported that mortgage rates dipped below 6%, and the latest median prices of existing and newly built homes from NAR and Census are $397k and $414k, respectively.
A year ago, rates were at 7.25% rates and newly built home prices cost $430k.
Today, with 6% rates and newly built home prices at $414k and existing home prices at $397k, homebuyers can buy homes with 5% down if they make $110k to $114k annually.
To make this calculation realistic for homebuyers and lenders who approve loans, The Basis Point includes mortgage payment, taxes, insurance, mortgage insurance, and $1000 in non-housing payments like car loans or credit cards.
The latest Intercontinental Exchange (ICE) data shows home price growth was relatively flat in 2025 at 0.6%, so home prices are favorable for buyers without a crash for sellers. If rates stay near 6% or drop more, home prices will rise again, so the timing this Spring is good for buyers.
Meanwhile, ICE also just reported that sellers are still sitting on near-record tappable equity of $11 trillion, and rates are down 1.25% versus one year ago, so homeowners can tap equity more cheaply to pay off debt or put a down payment on a new home.
So if you’re thinking about buying a home, 2026 may be your year. Your local lender can do free affordability math using your profile and your local market home prices.
January home affordability hit its best level in 4 years, with median earners spending 27.8% of their incomes on median priced homes. This housing payment-to-income ratio is down from 35.3% a year ago, per ICE.
If rates dropped another 1%, home prices would rise and squash these affordability gains for homebuyers. But it would help sellers tap record equity more cheaply.
If you have any questions, please reach out.
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Reference:
– Mortgage Rates Dip Back Into The 5s (Mortgage News Daily)
– Flat home prices help buyers & record equity helps refinancers (ICE)