The U.S. housing market has become increasingly difficult for prospective buyers due to a combination of rising mortgage rates and skyrocketing home prices, which have surged 50% over the past five years. The Federal Reserve's interest rate hikes, designed to combat inflation, have contributed to increased borrowing costs, leaving 75% of American households unable to afford a typical home. However, there are some encouraging trends, as median list prices have recently plateaued, and in various metro areas, home prices are beginning to fall, enhancing accessibility for some buyers.
America's housing affordability crisis has continued into 2025, with an estimated 75% of U.S. households unable to afford a typical home in today's market.
Economists note that the staggering surge in home prices is largely due to inventory shortages and rising demand during the COVID-19 pandemic.
Encouragingly, home prices appear to have plateaued recently, with median list prices increasing by less than 1% over the past year.
In certain areas across the country, home prices have dropped, making ownership more accessible for prospective buyers.
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