Housing costs could return to normal within five years if mortgage rates fall to 6% and price growth cools, Redfin’s chief economist says.
FOX Business covered a Redfin analysis released last week that maps how long it may take for U.S. housing costs to line up again with what people earn.
The short version is conditional. Rates and price growth have to move the right way. If they do, the gap can close in years, not decades. If they don’t, many buyers stay stuck.
Redfin’s baseline case is clear. Mortgage rates fall to 6%. Home price growth holds near 2.1% a year. Under those conditions, housing costs could return to “normal” within the next five years.
That is not a crash in prices. It is math catching up.
Daryl Fairweather, chief economist at Redfin, framed the finding in plain terms for FOX Business.
"When we say housing costs could return to normal within five years, we don't mean prices are just going to fall off a cliff. We mean the gap between what homes cost and what people earn can close, mostly because incomes keep growing while price growth cools,"
Fairweather added that the path is slow for anyone trying to buy right now.
"That's not a quick fix, and it won't feel like one for buyers who are stuck waiting right now. But we anticipate the math will move in the right direction, and that matters,"
Current mortgage rates sit around 7.5% in the coverage. That is the starting point for the other scenarios Redfin ran.
If rates stay near 7.5% and home price growth flattens, costs could normalize in about six years.
If rates drop to 6% and price growth flattens, Redfin’s timeline points to February 2029.
A sharper case shortens the wait further. Prices fall 2% year over year and rates fall to 6%. Then costs normalize in May 2028.
The hard case runs the other way. Rates stay elevated between 7% and 8%. Prices keep growing at 2.1% a year. Normalization then stretches to 10 years or more.
About half the metro areas Redfin analyzed fall into that longer bucket. The Midwest and Northeast show up again and again on the slow side of the map.
San Jose, California sits among the markets that could return to normal soonest under the better scenarios. Austin, Texas does too. So do Oakland, California; Seattle, Washington; and Portland, Oregon.
Boston, the New York City area, Chicago, and Milwaukee sit on longer clocks. In those places, a decade is a realistic floor if rates and prices do not ease.
National buyers should read that split carefully. “Normal” is not a single national date. It is a local finish line that depends on local prices and local incomes as much as the national mortgage rate.
Fairweather’s advice to shoppers was steady, not speculative.
"Buyers shouldn't try to time the market perfectly. If you find a home you can afford and plan to stay for a while, don't let the headlines scare you away from it,"
She closed the thought with a note for people still locked out on price.
"And if you can't afford to buy yet, the trend is on your side."
That is the core of the Redfin case. Affordability improves when paychecks keep rising and home-price gains cool. Lower rates help the monthly payment. Flat or falling prices help the entry price. None of it is instant.
The analysis treats “normal” as the gap between what homes cost and what people earn, not as a promise of fire-sale listings. Incomes do the heavy lifting over time. Price growth has to stop outrunning them.
Redfin’s release, summarized in the FOX Business coverage and detailed in the firm’s own write-up of the report, does not hand buyers a single guaranteed year. It hands them a set of if-then paths.
Rates near 6% with modest 2.1% price growth: about five years. Rates stuck near 7.5% with flat prices: about six. Rates at 6% with flat prices: February 2029. Rates at 6% with prices down 2% a year: May 2028. Rates in the 7% to 8% range with continued 2.1% growth: 10-plus years, and that is before metro differences.
Half the metros already look like decade-long waits under the tougher path. Coastal tech and Sun Belt names clear faster in the model. Large Northeast and Midwest markets clear slower.
For households watching payments eat the budget, the lesson is blunt. Mortgage math and price growth set the clock. Wishful thinking does not.
Affordability comes back when rates, prices, and paychecks line up again, not when politicians promise shortcuts the ledger will not support.