How to buy a home you can afford
Riding the ups and downs of the financial market is challenging, particularly as it pertains to figuring out the right time to buy a home. After years of volatility, recent data indicates that the housing market might have hit an affordability ceiling, creating a much-needed period of rebalancing.
Although prices remain high, the bidding wars and back-office tactics that may have dominated past years have cooled considerably. This means buyers may have a wider window in which to purchase a home that is more affordable, states Cotality, a data analytic service. Those looking to buy now can explore options to ensure their next home does not bust their budget.
Know the numbers
The first step to buying a home is understanding the median home price. According to data from Realtor.com and Redfin, the national median home price has stabilized at $429,156 in the United States. At the same time, mortgage rates have eased. CREA Statistics says the national average home price in Canada was $663,828 in March 2026. The average 30-year fixed rate is now around 6.0 to 6.3% as of April 2026. For the first time since 2022, the typical mortgage payment has fallen below the 30% affordability threshold. Rocket Mortgage says this is a standard guideline suggesting households spend no more than 30% of their gross monthly income on housing expenses.
Sit down with a lender
By working with a lender to run numbers, potential buyers can get a clear picture of what they can afford. Plus, a mortgage preapproval may be a necessity when putting in an offer on a property. Lenders often lean heavily on the 28/36 rule to determine risk. This means that total monthly housing costs (principal, interest, taxes, and insurance) should not exceed 28% of a person's gross monthly income, advises PNC Bank. Total debt payments, including that new mortgage, car loans, and student debt, should remain under 36%.
Account for hidden costs
Buyers may be inspired to widen their search criteria to find an affordable home. That could translate into choosing an older home or one that requires more repairs and upgrades. It's important that a budget include maintenance reserves for annual repairs, as well as construction costs for immediate needs.
Look for undervalued areas
Many areas of the country have featured recent corrections in the housing market, making housing more affordable. Corrections have occurred in parts of Florida, San Francisco, and Los Angeles, among other locales. Buyers can target these areas and consider widening their search radius, especially if they work remotely and need not worry about commuting.
Target ‘old’ listings
Buyers can have a real estate agent sort listings by how many days homes have been on the market. According to Mortgage Research, homes sitting on the market for more than 60 days are prime candidates for price cuts. Those homeowners also may be more inclined to negotiate.