Affordability has been the single biggest reason buyers have stayed on the sidelines over the past couple of years. And lately, the headlines are loud: “Rates have fallen!” “Now is the time to buy!”
But what does affordability really look like today?
Over the last several months, mortgage rates have quietly settled into one of the most stable and favorable ranges we’ve seen all year. Since mid-September, rates have come down meaningfully from the 7%+ range, and according to Freddie Mac, average rates are now hovering around the low-6% range, depending on loan type and borrower profile.
That change matters — a lot.
Here’s why:
A 1% drop in interest rates equals roughly a 10% increase in purchasing power for the same monthly payment.
That means:
- A buyer capped at an $800,000 home at 7%
- Could now afford closer to $880,000 at 6% — without increasing their payment
That shift alone can dramatically change what buyers see when they open up home search apps across the Southern California housing market or while relocating to Washington state.
Affordability isn’t just about prices — it’s about payments and options. Many buyers aren’t struggling because they don’t qualify; they’re struggling because they don’t like what they can afford. Lower rates expand choice.
There’s also a lot of political discussion about building more homes to solve affordability. While supply is important, the reality is construction costs remain high. Even aggressive policy changes might shave tens of thousands off new builds — helpful, but not game-changing.
The most real affordability shift happening right now isn’t hypothetical. It’s already here — and it’s being driven by rates.
No, we’re not at the point where everyone feels comfortable buying. And no, most experts aren’t expecting a sudden crash in interest rates. But compared to where we were a year or two ago — when rates were deep into the mid and upper 7s — today’s environment is undeniably better.
The key question for buyers, sellers, and agents in California and Washington isn’t “Are rates perfect?”
It’s “How does today compare to where I was before?”
If you haven’t revisited your numbers recently, you may be surprised by how much has changed.