3 Reasons Affordability Is Showing Signs of Improvement This Fall
For the past several years, many buyers have felt squeezed—home prices jumped, mortgage rates climbed, and making the numbers work often meant stretching one’s budget. If you paused your home search because it didn’t feel feasible, you’re not alone.
But there’s encouraging movement. Recent data shows that the typical mortgage payment for a new home purchase is about $290 lower than it was just a few months ago. That change is subtle, but in a tight market, every dollar counts.
What’s driving this shift? Three main factors are aligning in favor of buyers:
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Mortgage Rates Are Easing
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Home Price Growth Is Slowing
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Wages Are Outpacing Price Increases
Together, these trends are softening the burden on buyers. Let’s look more closely at each, and then what it means for Colorado buyers right now.
Mortgage Rates Are Easing
Mortgage rates have dropped compared to earlier this year. In May, many markets saw rates near 7 percent. Today, rates more often fall closer to 6.3 percent.
That reduction perhaps doesn’t sound dramatic—but for a buyer financing a $400,000 mortgage, it can translate to saving around $190 per month just from the rate difference. In a market where every cost margin matters, that shift can turn infeasible into manageable.
As Joel Kan, VP and Deputy Chief Economist at the Mortgage Bankers Association, put it: the drop in rates helped spur one of the strongest weekly gains in buyer demand since 2022. Purchase applications jumped and remained more than 20 percent higher than the prior year’s pace.
When rates pull back, buyer power and confidence return.
Home Price Growth Is Slowing
Prices are no longer racing upward at the pace we saw during the post-pandemic surge. Instead, the market is seeing more moderate increases—low single digits in many areas.
That’s good news for buyers. It means your target home’s price is less likely to leap beyond reach before you make your move. In some submarkets, prices have even softened slightly.
Slower price growth gives buyers better predictability and reduces the risk of overextending based on past trends.
Wages Are Rising Faster Than Home Prices
One of the least talked-about — but powerful — contributors to affordability is wage growth. According to data from the Bureau of Labor Statistics, annual wage growth has been near 4 percent.
What’s key: wages are now rising faster than home prices in many markets. That means more money in buyers’ pockets relative to what they need to pay. In effect, your income is gaining ground faster than the cost of homes.
While 4 percent on its own isn’t a windfall, in a market where affordability has been stretched, that margin matters. It’s part of what’s turning the tide.
What These Trends Mean for Buyers in Colorado
If you’ve been waiting for a window, this fall may be it. Here’s how you can act smart in today’s evolving Colorado market:
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Revisit your budget. With lower rates and slower price gains, your purchasing power may be greater than what you last calculated.
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Watch inventory in your preferred neighborhoods. As more homes enter the market, you’ll have more choices.
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Be ready to act. The window may not stay open. When you find a home that aligns with your criteria and budget, having financing in place matters.
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Ask for incentives or credits. With the shifting leverage, sellers may be more open to helping with closing costs or making upgrades.
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Compare fixed vs adjustable opportunities. In some cases, shorter-term rate structures or bridge strategies may make sense in this environment.
For buyers who felt priced out even months ago, this combination of favorable rate, price, and income trends may create the breathing room needed to enter the market again.
What Sellers Should Know
While this improvement in affordability primarily benefits buyers, sellers should also pay attention:
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As more buyers return, competition for well-priced homes will recover.
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Homes with pricing that aligns with market expectations will outperform those priced out of the range buyers can support.
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Seller incentives (closing cost credits, rate buydowns, repairs) may become more common and expected in some markets.
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Time on market may lengthen slightly in submarkets where supply is rising.
If you plan to list, work with a broker who understands these market pivots so your home is positioned advantageously.
A Reminder: This Is Not a “Reset”
Affordability is improving, but it’s not easy. Mortgage payments are still higher than what many buyers would consider comfortable. Inventory constraints persist in many desirable neighborhoods.
These changes don’t erase the challenges of the past few years—but they do open opportunity for buyers who are prepared, informed, and ready to act thoughtfully.
If you’re curious how these affordability shifts affect your target area, want help re-running your numbers, or need a deep dive into your home’s value in context, reach out. Visit www.corken.co or call 303-858-8003 and let’s explore what’s happening in your market.
Corken + Company Real Estate Group
Real Estate Solutions Without Limits.
