Housing Affordability Is Finally Improving in Silicon Valley

If you have been watching the Silicon Valley housing market from the sidelines, you are not alone. For the past few years, affordability has been the biggest challenge for both buyers and sellers trying to make a move.

The good news is that conditions are starting to shift.

In 2025, affordability reached its best level in nearly three years, and many housing economists expect gradual improvement to continue into 2026. That outlook is based on three key factors that shape the market: mortgage rates, inventory, and home prices.

Mortgage rates have already come down from recent highs. While forecasts suggest they may stay relatively stable rather than dropping dramatically, today’s rates are still meaningfully lower than they were a year ago. Even small changes in rates can affect monthly payments and buying power, which helps some buyers reenter the market.

Inventory has also been improving. More homes for sale gives buyers more options and more time to make decisions. That shift has helped ease some of the pressure we saw during the most competitive years and has contributed to slower, more sustainable price growth.

Price growth itself has moderated. Nationally, experts expect prices to continue rising, but at a slower pace. In Silicon Valley, results will vary by neighborhood and price range. Some areas may see modest increases, while others may flatten or adjust slightly. Local conditions matter.

Taken together, these trends point toward a more balanced market. Buyers may find a bit more breathing room. Sellers may see steadier demand without extreme volatility.

Affordability is not changing overnight, but the direction is encouraging. For many households, 2026 may finally feel like a window to move forward.