Short-lived mortgage rate relief boosted affordability to a 19-month high in September
Rhea-AI Summary
A new Zillow analysis reveals that middle-income households could afford more homes in September 2024 than in any month since February 2023. When mortgage rates averaged 6.18% in September, 27.7% of homes for sale were affordable, up from 22.7% in May when rates were at 7.06%. However, rates have since climbed back to 6.78% by mid-November, highlighting market volatility.
In October 2024, all 50 largest metro areas showed improved affordability compared to the previous year. Pittsburgh led with 72.1% affordable listings, while Los Angeles remained least affordable at 1.6%. Sun Belt markets, particularly Austin, saw the largest year-over-year improvements in affordability.
Positive
- Increased home affordability across all 50 largest metro areas compared to previous year
- September 2024 saw highest affordability levels in 19 months
- 12 markets showed more than 50% of homes as affordable for middle-income households
Negative
- Mortgage rates increased from 6.18% in September to 6.78% by mid-November
- Major California markets remain highly unaffordable with less than 15% of listings accessible to middle-income households
- Volatile mortgage rates creating uncertainty for homebuyers
News Market Reaction
On the day this news was published, ZG gained 2.41%, reflecting a moderate positive market reaction.
Data tracked by StockTitan Argus on the day of publication.
Unpredictable rate movements are quickly changing the affordability picture for home shoppers
- Lower mortgage rates in September brought the share of homes a middle-income household could comfortably afford to a 19-month high.
- Mortgage rates have already climbed back to nearly
7% , highlighting the need for real-time data for buyers to understand what they can afford. - Mortgage rates remain lower than they were a year ago. Even with the increase in October, the share of affordable listings was greater than a year earlier in all of the nation's 50 largest metro areas.
Mortgage rates have been moving quickly over the past few months, which can make a big impact on what home shoppers can afford. In May, when mortgage rates averaged
"Affordability remains the top challenge for first-time home buyers especially, and buying power can change quickly with the unpredictable nature of mortgage rates," said Orphe Divounguy, a senior economist for Zillow Home Loans. "Buyers should expect more ups and downs ahead for mortgage rates. While there's no guarantee, signs point to rates moving a bit lower into next year. However, the path will be bumpy, and buyers should stay ready to move forward when the time is right for them."
Mortgage rates are proving to be extremely volatile, having risen to
October market trends
In October, when mortgage rates averaged
Many markets with the greatest gains from last year in the share of listings affordable to a middle-income household are in the Sun Belt.
Large markets in
Metro Area* | Share of Affordable | Share of Affordable | Share of Affordable |
27.2 % | 27.7 % | 22.7 % | |
11.4 % | 11.6 % | 10.5 % | |
1.6 % | 1.9 % | 1.5 % | |
43.2 % | 42.3 % | 35.8 % | |
28.1 % | 28.9 % | 20.4 % | |
39.6 % | 40.7 % | 32.2 % | |
44.3 % | 44.5 % | 36.4 % | |
51.2 % | 51.7 % | 44.6 % | |
23.9 % | 24.8 % | 21.0 % | |
46.0 % | 47.4 % | 37.9 % | |
11.6 % | 12.7 % | 9.3 % | |
24.0 % | 26.0 % | 18.2 % | |
14.0 % | 15.3 % | 10.7 % | |
12.6 % | 13.2 % | 9.7 % | |
61.5 % | 60.7 % | 56.5 % | |
17.1 % | 16.7 % | 12.7 % | |
50.6 % | 51.0 % | 40.9 % | |
4.2 % | 4.3 % | 2.7 % | |
26.5 % | 27.4 % | 21.3 % | |
22.9 % | 23.0 % | 17.2 % | |
56.2 % | 56.2 % | 50.2 % | |
64.2 % | 64.6 % | 60.2 % | |
22.3 % | 22.9 % | 18.0 % | |
33.0 % | 33.9 % | 26.4 % | |
33.1 % | 34.4 % | 25.5 % | |
18.5 % | 19.5 % | 15.2 % | |
10.5 % | 10.6 % | 6.9 % | |
72.1 % | 73.1 % | 64.4 % | |
53.5 % | 53.3 % | 44.9 % | |
26.3 % | 27.0 % | 17.8 % | |
18.9 % | 19.6 % | 17.1 % | |
51.2 % | 50.6 % | 43.6 % | |
45.4 % | 45.4 % | 37.3 % | |
59.5 % | 60.1 % | 49.3 % | |
57.2 % | 56.5 % | 49.7 % | |
7.2 % | 7.0 % | 4.1 % | |
18.6 % | 20.6 % | 13.3 % | |
43.9 % | 45.3 % | 36.9 % | |
14.5 % | 17.5 % | 12.0 % | |
39.9 % | 41.0 % | 31.7 % | |
46.4 % | 44.8 % | 39.6 % | |
42.7 % | 42.5 % | 32.7 % | |
40.3 % | 42.2 % | 32.1 % | |
47.7 % | 48.0 % | 42.4 % | |
43.1 % | 44.8 % | 36.1 % | |
48.4 % | 48.4 % | 41.0 % | |
36.9 % | 38.5 % | 30.4 % | |
22.7 % | 23.9 % | 14.6 % | |
41.8 % | 41.3 % | 36.0 % | |
63.7 % | 64.8 % | 55.7 % | |
54.8 % | 54.7 % | 48.7 % |
*Table ordered by market size
**Assuming a median-income household and
About Zillow Group
Zillow Group, Inc. (Nasdaq: Z and ZG) is reimagining real estate to make home a reality for more and more people. As the most visited real estate website in
Zillow Group's affiliates, subsidiaries and brands include Zillow®, Zillow Premier Agent®, Zillow Home Loans℠, Zillow Rentals®, Trulia®, Out East®, StreetEasy®, HotPads®, ShowingTime+℠, Spruce®, and Follow Up Boss®.
All marks herein are owned by MFTB Holdco, Inc., a Zillow affiliate. Zillow Home Loans, LLC is an Equal Housing Lender, NMLS #10287 (www.nmlsconsumeraccess.org). © 2024 MFTB Holdco, Inc., a Zillow affiliate.
1 Average of the weekly 30-year, fixed-rate mortgage rates during the month, according to the Freddie Mac Primary Mortgage Market Survey.
2 A household is considered able to afford a home if the estimated monthly mortgage payment on that home would cost no more than
View original content to download multimedia:https://www.prnewswire.com/news-releases/short-lived-mortgage-rate-relief-boosted-affordability-to-a-19-month-high-in-september-302309747.html
SOURCE Zillow
FAQ
What percentage of homes were affordable to middle-income households in September 2024?
Which US metro area had the highest percentage of affordable home listings in October 2024?
How did mortgage rates change from September to November 2024?
