Century 21 Real Estate CEO Mike Miedler discusses the impact of mortgages on the housing market, the argument that affordability is still the biggest problem.
The mortgage interest rate is strongly removed from their recent peaks, and offers some lighting to buyers and refinancing opportunities for homeowners who have been “stuck” in the so-called “Golden Handboei effect”, but industry experts still warn that coming back to a path of real affordability will take time.
Because the interest rates after the flowering of the COVID-19 Pandemic housing are enriched, there has been little movement in the market. Homeowners were not willing to sell because they had to give up their ultra-lower mortgage interest and potential buyers were confronted with a limited inventory and higher loan costs.
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The affordability of housing remains a problem for potential home buyers. (Patrick T. Fallon / AFP via Getty Images / Getty images)
“This increased range offers buyers more selection than we have seen in recent years, which creates a more balanced real estate market,” said White. “Although the interest rates remain a key factor, the improved stock situation is one of the more striking shifts that we have seen this year, and we believe that the accessibility of the market for qualified buyers could improve, because these factors will continue to evolve in the coming months and next year.”
While the RealTor.com chief economist said that it is too difficult to be sure how affordability will be in 2026 and 2027, she said that the mortgage interest rate has fallen nearly 70 basic points from the 2025 High and about 150 basic points of the peak of 2023, which has already improved affordability for the short term.
The average rate on a fixed mortgage of 30 years fell to 6.35%last week, which marked the largest weekly decrease in the past year, according to Mortdiekoper Freddie Mac.
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“This creates refinancing options for those who have purchased houses in these peak periods and also creates considerable affordability towards these periods,” Hale said. “Whether we see further improvements in affordability in 2026/2027 is a more open demand.”
A house is for sale in Arlington, Virginia. (Saul Loeb / AFP via Getty Images / Getty images)
The interest rates are expected to remain in the low range of 6% for at least the following year, according to Hale, who stated that the market has already priced in various cuts between now and mid -2026. She only expects modest affordability improvements of mortgage interest in the following year.
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Hale also predicted that the income will grow, which will help alleviate the financial burden. But as the labor market cools, this growth is probably not as robust as it has been.
Another important contribution to improving affordability is lower house prices, she said.
Townhomes under construction in Bayport, New York. (Steve Pfost / NewSday RM via Getty Images / Getty images)
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Hale underlined that no “full affordability unlocked in 2026/2027”, but that there is still “potential for modest improvement in the affordability of homes” with even more potential on some softer house markets.
