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The share of home listings that veterans can afford has dropped from roughly 57 percent in 2015 to 21.8 percent in 2025, as rising costs and slowing wage growth put more of the market out of reach.
Veterans can afford fewer than a quarter of current home listings, according to Redfin’s latest market report.
The typical veteran household can afford only 21.8 percent of home listings with a VA loan, which requires no down payment and no private mortgage insurance (PMI). However, veteran households using conventional loans can afford a greater share of the housing market at 26.5 percent.
This is a slight improvement from 2023, when veteran households using a VA loan could afford a dismal 20.2 percent of listings.
Grishma Bhattarai | Credit: LinkedIn
“VA loans provide a great opportunity for first-time veteran homebuyers to purchase a home without the substantial down payment that’s required of most buyers these days,” Redfin Economist Grishma Bhattarai said in a prepared statement. “It allows them to get their foot in the homeownership door and start building equity.”
The benefits of VA loans come with some tradeoffs, the report said. Most households with VA loans don’t make a down payment, which helps lower the upfront costs of purchasing a home. However, the lack of a down payment leads to larger loans and higher monthly costs.
Rising incomes, stabilizing mortgage rates and slowing home price growth have led more veteran households to use VA loans in recent months, with 7.3 percent of mortgaged homebuyers using the loan in August — a 10.76 percent increase from 2024 and the highest rate since 2019.
Still, Bhattarai said conventional loans will likely continue to be the top choice for veteran households.
“That tradeoff is likely the reason why some veterans choose to take out a conventional loan and make a down payment, even if they qualify for a VA loan,” she said.
Detroit is the best market for veterans using VA loans, with a whopping 60 percent of listings being affordable. San Antonio (53.4 percent), Cleveland (48.3 percent), Pittsburgh (43.6 percent) and Baltimore (42.7 percent) are also top options, with more than half of listings being affordable for veterans using VA loans. This market lineup is the same for veterans using conventional loans; however, the percentage of affordable listings edges up by nearly 10 percentage points.
On the flip side, veterans using VA or conventional loans are effectively priced out of California, where they’re able to afford only 1 percent to 3 percent of current listings.
Although affordability for veterans has seen a slight improvement since 2023, it remains significantly lower than 10 years ago.
In 2015, a veteran using a VA loan could afford 53 percent of home listings nationwide, and a veteran using a conventional loan could afford roughly 57 percent. Rising housing costs and slowing wage growth are to blame, the report said, with the typical veteran’s household income increasing 48 percent since 2015, roughly half the rate of home prices.
“Even with access to financial tools like VA loans, the typical veteran is priced out of many listings,” the report read. “A low-down-payment loan can only do so much when home prices and mortgage rates are elevated.”
“The bright side is that homebuying affordability has started improving in parts of the country where home prices are declining, including several Florida metros, Phoenix and Atlanta,” it added. “And mortgage rates have come down from their peak, with the average 30-year fixed rate sitting near its lowest level in a year.”
