The Road to 30%: Is Homeownership Finally Affordable Again?
During the first half of 2026, many prospective homebuyers have chosen to wait on the sidelines. Closely watching a volatile mortgage market, many have held out hope for a dramatic drop in rates. Instead, recent upward rate pressure has kept the cost of borrowing elevated, forcing buyers to rethink their timelines.
However, an opportunity may be emerging as we head into the second half of the year. While rates remain stubborn, home value appreciation is finally slowing down, inventory is ticking up and rising wages are beginning to outpace home price growth. These shifting dynamics are giving buyers renewed leverage, making it possible to secure a home while keeping monthly housing expenses within 30% of their gross income—a foundational financial safety net known as the 30% rule.
Let’s explore why a stabilizing housing market could mean a clearer path to affordability this summer and breaks down how you can use the 30% rule to navigate your own home purchase with confidence.
If you were to ask people, "Will homeownership be affordable in mid-2026 and in the second half of the year?" you would likely receive a variety of responses. Factors such as individual financial situations and regional differences—like housing prices, demand and inventory levels—would influence their answers.
As a result, there are no right or wrong answers to this question, as each person's situation is unique. However, recent developments in the following economic indicators suggest that homeownership is indeed becoming more affordable.
Mortgage Rates
Mortgage rates have been hovering in the low to mid 6% range since March 5, 2026.1 Rates rose again but have retreated, presenting more favorable conditions for borrowers. On May 15, 2026, the average 30-year fixed rate for a conventional loan was 6.499%, and the average rate for a 30-year jumbo loan was 6.656%.2 In comparison, one year ago, the rates for these loan options were higher, at 6.862% and 6.987%, respectively.3
Home Values
The days of rapidly rising home values appear to be behind us. Home values across the nation rose 1.2% year-over-year in March 2026.4 To put this into perspective, home values have grown an average of 4.5% each year since 2001.5 When home values rise more slowly, affordability improves for buyers when these properties go up for sale. It is important to note that home values can fluctuate based on the specific market in which they are located, and the 1.2% figure represents a national average.
Wage Growth
Higher wages can boost the purchasing power of those seeking to buy a home. As of April 2026, year-over-year wage growth has increased by 3.6%.6 A global advisory firm predicts this trend will continue through the remainder of 2026, with wages expected to grow by 3.4%, outpacing home price growth.7
Housing Affordability
In April 2026, the Housing Affordability Index was 110.6, up from 101.4 a year ago.8 A score above 100 indicates that the average family has more than enough income to qualify for a mortgage on a national median-priced, existing single-family home. Therefore, an Index score of 110.6 in April 2026 means that the average family has 110.6% of the income required to qualify for such a mortgage.
The 30% Rule
The Realtor.com 2026 Housing Forecast indicates that the monthly payment for an average home will drop to 29.3% of median household income.9 This is below the 30% affordability benchmark, known as the 30% rule, for the first time since 2022.10 While this is a modest improvement, it suggests better conditions for buyers.
Buying a home is a big milestone and could be the most significant financial investment that you will ever make. Therefore, you need to understand all the costs associated with your purchase, both upfront and ongoing, to ensure you can afford it.
The basis of the 30% rule is that you should spend no more than 30% of your monthly pre-tax income on housing costs (e.g., mortgage payments, property taxes, etc.). By staying within this 30% limit, you can set aside 70% of your income for savings and other expenses.
To illustrate the 30% rule, let's consider a family with a total pre-tax income of $9,000. In this scenario, the family's total monthly housing costs should not exceed $2,700, which is calculated as 30% of $9,000 ($9,000 x 30% = $2,700).
Owning a home involves several costs, including mortgage payments, property taxes and homeowners' insurance (if applicable). If the property is in a planned community, you may also need to pay homeowner's association (HOA) fees. When looking for a home, it's important to calculate these costs and compare them to your monthly pre-tax income.
If the monthly housing costs exceed 30% of your monthly pre-tax income, you may run into financial challenges in the future. Sticking to the 30% rule can help you manage your monthly expenses with less financial worry and strain. It can also help you prepare for future expenses, such as vacations, education, or retirement savings.
Another benefit of keeping your monthly housing costs below 30% of your monthly pre-tax income is that it lowers your debt-to-income (DTI) ratio. A lower DTI is appealing to lenders and can help you secure other types of financing (e.g., an automobile loan or a personal line of credit) with better rates and terms.
The type of mortgage you choose will determine your monthly payment amount and overall financial flexibility. For example, a fixed-rate mortgage has the same interest rate throughout the loan. This results in consistent payments, making it easier for you to budget and manage expenses.
In contrast, adjustable-rate mortgages (ARMs) usually begin with lower initial payments but may increase after a set period. If the interest rate on your ARM rises, perhaps due to a benchmark rate increase, your monthly mortgage payments will increase as well. Consequently, this could result in your housing costs exceeding 30% of your monthly budget.
Navigating a shifting market requires more than just watching the numbers—it takes a personalized strategy. If you are planning a home purchase this summer, you don't have to figure it out alone. Ameris Bank is here to help you weigh your options, untangle the math behind the 30% rule, and find a mortgage structure that truly fits your lifestyle.
1, 2, 3 https://www2.optimalblue.com/obmmi
4 https://www.redfin.com/us-housing-market
5 https://www.zillow.com/learn/how-much-do-homes-appreciate-per-year/
6 https://usafacts.org/answers/are-wages-keeping-up-with-inflation/country/united-states/
7 https://www.wtwco.com/en-ke/insights/2026/02/will-salary-increases-outpace-inflation-in-2026
8 https://www.nar.realtor/newsroom/nar-existing-home-sales-report-shows-0-2-increase-in-april
9, 10 https://www.realtor.com/research/2026-national-housing-forecast/
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. Ameris Bank does not endorse nor is affiliated with the companies listed in this article.
However, an opportunity may be emerging as we head into the second half of the year. While rates remain stubborn, home value appreciation is finally slowing down, inventory is ticking up and rising wages are beginning to outpace home price growth. These shifting dynamics are giving buyers renewed leverage, making it possible to secure a home while keeping monthly housing expenses within 30% of their gross income—a foundational financial safety net known as the 30% rule.
Let’s explore why a stabilizing housing market could mean a clearer path to affordability this summer and breaks down how you can use the 30% rule to navigate your own home purchase with confidence.
Key Indicators and Data
If you were to ask people, "Will homeownership be affordable in mid-2026 and in the second half of the year?" you would likely receive a variety of responses. Factors such as individual financial situations and regional differences—like housing prices, demand and inventory levels—would influence their answers.As a result, there are no right or wrong answers to this question, as each person's situation is unique. However, recent developments in the following economic indicators suggest that homeownership is indeed becoming more affordable.
Mortgage Rates
Mortgage rates have been hovering in the low to mid 6% range since March 5, 2026.1 Rates rose again but have retreated, presenting more favorable conditions for borrowers. On May 15, 2026, the average 30-year fixed rate for a conventional loan was 6.499%, and the average rate for a 30-year jumbo loan was 6.656%.2 In comparison, one year ago, the rates for these loan options were higher, at 6.862% and 6.987%, respectively.3
Home Values
The days of rapidly rising home values appear to be behind us. Home values across the nation rose 1.2% year-over-year in March 2026.4 To put this into perspective, home values have grown an average of 4.5% each year since 2001.5 When home values rise more slowly, affordability improves for buyers when these properties go up for sale. It is important to note that home values can fluctuate based on the specific market in which they are located, and the 1.2% figure represents a national average.
Wage Growth
Higher wages can boost the purchasing power of those seeking to buy a home. As of April 2026, year-over-year wage growth has increased by 3.6%.6 A global advisory firm predicts this trend will continue through the remainder of 2026, with wages expected to grow by 3.4%, outpacing home price growth.7
Housing Affordability
In April 2026, the Housing Affordability Index was 110.6, up from 101.4 a year ago.8 A score above 100 indicates that the average family has more than enough income to qualify for a mortgage on a national median-priced, existing single-family home. Therefore, an Index score of 110.6 in April 2026 means that the average family has 110.6% of the income required to qualify for such a mortgage.
The 30% Rule
The Realtor.com 2026 Housing Forecast indicates that the monthly payment for an average home will drop to 29.3% of median household income.9 This is below the 30% affordability benchmark, known as the 30% rule, for the first time since 2022.10 While this is a modest improvement, it suggests better conditions for buyers.
Overview of the 30% Rule
Buying a home is a big milestone and could be the most significant financial investment that you will ever make. Therefore, you need to understand all the costs associated with your purchase, both upfront and ongoing, to ensure you can afford it. The basis of the 30% rule is that you should spend no more than 30% of your monthly pre-tax income on housing costs (e.g., mortgage payments, property taxes, etc.). By staying within this 30% limit, you can set aside 70% of your income for savings and other expenses.
To illustrate the 30% rule, let's consider a family with a total pre-tax income of $9,000. In this scenario, the family's total monthly housing costs should not exceed $2,700, which is calculated as 30% of $9,000 ($9,000 x 30% = $2,700).
Reasons to Factor in the 30% Rule When Buying a Home
Owning a home involves several costs, including mortgage payments, property taxes and homeowners' insurance (if applicable). If the property is in a planned community, you may also need to pay homeowner's association (HOA) fees. When looking for a home, it's important to calculate these costs and compare them to your monthly pre-tax income.If the monthly housing costs exceed 30% of your monthly pre-tax income, you may run into financial challenges in the future. Sticking to the 30% rule can help you manage your monthly expenses with less financial worry and strain. It can also help you prepare for future expenses, such as vacations, education, or retirement savings.
Another benefit of keeping your monthly housing costs below 30% of your monthly pre-tax income is that it lowers your debt-to-income (DTI) ratio. A lower DTI is appealing to lenders and can help you secure other types of financing (e.g., an automobile loan or a personal line of credit) with better rates and terms.
How Mortgage Options Can Impact the 30% Rule
The type of mortgage you choose will determine your monthly payment amount and overall financial flexibility. For example, a fixed-rate mortgage has the same interest rate throughout the loan. This results in consistent payments, making it easier for you to budget and manage expenses.In contrast, adjustable-rate mortgages (ARMs) usually begin with lower initial payments but may increase after a set period. If the interest rate on your ARM rises, perhaps due to a benchmark rate increase, your monthly mortgage payments will increase as well. Consequently, this could result in your housing costs exceeding 30% of your monthly budget.
Navigating a shifting market requires more than just watching the numbers—it takes a personalized strategy. If you are planning a home purchase this summer, you don't have to figure it out alone. Ameris Bank is here to help you weigh your options, untangle the math behind the 30% rule, and find a mortgage structure that truly fits your lifestyle.
1, 2, 3 https://www2.optimalblue.com/obmmi
4 https://www.redfin.com/us-housing-market
5 https://www.zillow.com/learn/how-much-do-homes-appreciate-per-year/
6 https://usafacts.org/answers/are-wages-keeping-up-with-inflation/country/united-states/
7 https://www.wtwco.com/en-ke/insights/2026/02/will-salary-increases-outpace-inflation-in-2026
8 https://www.nar.realtor/newsroom/nar-existing-home-sales-report-shows-0-2-increase-in-april
9, 10 https://www.realtor.com/research/2026-national-housing-forecast/
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. Ameris Bank does not endorse nor is affiliated with the companies listed in this article.
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