Monthly costs have already eased. Using a December average mortgage rate of 6.2% and a 20% down payment assumption, Zillow puts the typical payment at $2,337 – $92 less than a year earlier and $177 below the October 2023 peak.
However, the 20% down payment itself remains a hurdle: on a $359,078 home, that meant nearly $71,800 in cash, rising above $73,000 if Zillow’s appreciation forecast held.
Other indicators have echoed a gradual turn. Freddie Mac’s latest Primary Mortgage Market Survey showed the average 30‑year fixed rate at 6.06% in mid‑January 2026, down from 7.04% a year earlier.
First American chief economist Mark Fleming struck a similar note of cautious optimism. “Affordability remains challenging, but for the first time in several years, the underlying forces are finally aligned toward gradual improvement,” he said.
“Mortgage rates may drift down only slowly, but income growth exceeding house price appreciation will provide a boost to house-buying power – even in a higher-rate world.”
