SUMMARY: Thinking about buying a new home this year? Falling mortgage rates may seem like good news, but they’re only part of the story.

While the 2026 homebuying season began on a positive note, as falling mortgage rates helped make homes more affordable than they’ve been in years, improvements in other key factors are raising hopes that the housing market will soon end a four-year slump. 

What’s driving affordability right now?
Several factors are shaping today’s housing market, including:

Interest rates: Rates recently dipped below 6% for the first time in years, a key milestone that’s encouraging for buyers. But then they rose again due to inflation concerns. Forecasts predict rates could ease later this year, potentially putting homeownership within reach for more people.
Home prices: Rising home prices have slowed significantly. Over the past year, home prices rose less than 1%, well below the 10-year average of 6%. That slowdown helps improve affordability.
Inventory: More homes are hitting the market, giving buyers more options and easing competition. New listings were up 4.6% year over year, and up nearly 30% from the previous month, according to Zillow.
Total cost of ownership: Expenses like insurance, utilities and fees rose after the pandemic, but the pace of those increases has started to slow, making overall costs feel more manageable.

Why getting pre-approved still matters (more than you think)
The value of pre-approval by a lender is one part of homebuying that hasn’t changed. When you’re pre-approved for a specific loan amount, you know what you can afford. This can keep you from making an offer that exceeds your borrowing capacity.

Lender pre-approval also shows sellers you’re serious and capable. If a bidding war erupts, a seller may discount an offer that lacks pre-approval, even if it’s for more money. 

American Airlines Federal Credit Union offers a quick and free pre-approval, allowing you to lock in your rate for 60 days.* Click here to start the application process now.

We’re also excited to announce an upcoming, long-awaited digital update that will make it easier to view mortgage details, manage payments, and allow joint members to access shared loans more seamlessly through online banking.

How to choose the right loan for you
Every home loan comes down to three key factors:

Loan type
Most loans are conventional, while others come from government programs like FHA or state and local housing agencies.

• Conventional loans often cost less but can be harder to qualify.
• Government-backed loans can help if you have a lower credit score or smaller down payment. Please note: While the Credit Union may not offer government loans, we do have comparable program for lower down payments and/or credit scores.

Loan term
The most common options are 30-year and 15-year loans.

• 30-year loans: Lower monthly payments, but more interest over time 
• 15-year loans: Higher monthly payments, but less interest overall 

Interest rate
Rates can be fixed or adjustable.

• Fixed-rate loans: Stable payments over time 
• Adjustable-rate loans: Lower starting rates, but payments can increase later

When refinancing makes sense
Refinancing replaces your current loan with a new one, often to lower your monthly payment or to access cash. Please note: If you have an existing mortgage with the Credit Union, please reach out to the Mortgage Servicing Department to determine if refinancing is the right move.

But it may be a good option if:

• You can secure a rate about 1% lower than your current loan.
• Your credit score has improved.
• You can check your personal credit score for free by logging into online banking.
• You want to eliminate mortgage insurance.
• You need to tap into home equity for other expenses.

It may not be worth it if:

• Your loan balance is already low.
• The rate difference is minimal.
• Closing costs outweigh the possible savings.

The bottom line: With the right preparation and a clear understanding of your options, today’s market may offer more opportunities than it has in years.

* We offer a free 60-day rate lock on both purchase and refinance transactions and a free 90-day rate lock on construction-to-perm loans. All rate locks are valid for up to 60 or up to 90 days respectively from the date the Rate Lock Agreement is signed. Certain terms and restrictions apply. Contact a mortgage loan officer for full details.