Housing Affordability Improves for Veterans

Homebuyers across the U.S. have struggled with affordability over the last several years, but at least for veterans, affordability seems to be improving slightly. According to real estate marketing platform Redfin, 21.8% of U.S. home listings are now affordable to the typical U.S. military veteran using a VA loan. For those using a conventional loan, 26.5% of listings are considered affordable.

While affordability for veterans has declined over the past decade, this figure represents an improvement from 2023 when affordability was at a record low. At that time, just 20.2% of listings were affordable to the typical veteran using a VA loan in 2023, and 25.5% were affordable to veterans using a conventional loan.

However, both veterans and non-veterans can afford a smaller share of homes than they could 10 years ago. In 2015, a veteran using a VA loan could afford 53% of home listings nationwide, more than double the share they can afford today. A veteran using a conventional loan could afford roughly 57% of listings in 2015, and a non-veteran using a conventional loan could afford about 52% of listings.

It has become much more difficult to afford a home because sale prices skyrocketed during the pandemic, then rising mortgage rates pushed monthly housing payments to new heights.

The hike in housing costs has far outpaced income increases over the last 10 years. The median U.S. home-sale price has roughly doubled over that period, with the biggest jump in 2021, when record-low mortgage rates and remote work caused a homebuying frenzy. The typical veteran’s household income has increased by 48% over that period, roughly half the rate of home prices. The typical non-veteran’s income has increased 54%.