Housing Affordability Continues to See Welcome Improvement in Q1: Report

Home-price growth continues to depreciate across multiple reports as the latest data from the National Association of Realtors® (NAR) saw improvements to affordability once again in Q1 2026.

NAR’s Q1 Metropolitan Median Area Prices and Affordability data found that the national median home price was $404,300, observing only a 0.5% year-over-year increase, compared to 1.2% in Q4 2025.

This is similar to the trend seen in recent Case-Shiller reports, with the latest data for February showing a 0.7% year-over-year gain in prices (down from 0.8% from January. As of February’s report, Nicholas Godec—head of Fixed Income Tradables & Commodities at S&P Dow Jones Indices—noted that “U.S. home values have lost ground in real terms for nine consecutive months.”

Breaking down the affordability improvements NAR observed, 27% of markets saw declines in home prices, which is up from 25% in Q4 and up from 17% in Q1 2025. The monthly mortgage payment (on a typical existing single-family home with a 20% down payment) was down $78 from last quarter and $140 from last year to $1,979. Lastly, the share of income spent on mortgage payments came in at 21.5%, down from 22.9% last quarter and 24.3% last year.

NAR Chief Economist Lawrence Yun noted that, while mortgage rates remain elevated, they are below last year’s levels, which helps to improve affordability and “will allow more potential buyers to qualify for and obtain a mortgage.”

Home prices did see increases in Q1 in 71% of the metros tracked (167 out of 235), but this was a slight decrease from 73% of metros in Q4.

Yun also noted that increases in affordability were observed in the condo market, which “is showing signs of stabilization and, in some metro areas, even outperforming the single-family market in terms of price gains,” drawing buyers back in.

First-time buyers also continue to see welcome improvements in affordability in Q1. The typical monthly mortgage payment for first-time buyers was down $76 from last quarter and $135 from last year to $1,943. The share of income spent on a mortgage payment came in at 32.5%, down from 34.6% last quarter and 36.6% last year.

Looking regionally, three out of the four regions saw year-over-year increases: the Northeast was up by 4.9% to $506,500, the Midwest was up by 3.6% to $308,100 and the South was up by 0.2% to $362,300. The only region to see a year-over-year decrease was the West, falling 2.9% to $607,600—what some would classify as a needed change for the high price region.

Even with a year-over-year decrease, the West continues to dominate amongst the most expensive markets, claiming nine out of the top 10 spots in NAR’s report—eight of which are in California alone:

San Jose, California ($2,030,000; +0.5%)
Anaheim, California ($1,442,900; -0.5%)
San Francisco, California ($1,350,000; +2.3%)
Urban Honolulu, Hawaii ($1,175,100; +0.9%)
San Diego, California ($1,050,000; +1.3%)
San Luis Obispo, California ($956,800; +0.4%)
Oxnard, California ($944,200; +1.4%)
Salinas, California ($943,500; -1.2%)
Los Angeles, California ($858,500; -0.5%)
Naples, Florida ($845,000; -2.3%)

Additionally, 7% of metro areas (16 out of 235) recorded double-digit price gains, up from 5% in Q4. The largest year-over-year price increases recorded in Q1 were a bit more mixed across the regions, with four in the Northeast, four in the Midwest, one in the South and one in the West: