Housing affordability under pressure
With 30-year mortgage rates hovering near 6.9 percent, U.S. housing affordability has hit a 38-year low. The median home price-to-income ratio now exceeds 5.2, compared with 3.6 in 2019. Construction bottlenecks and local zoning rules compound the supply deficit of roughly 3.2 million homes.
Table 1. Key Housing Indicators
| Metric | 2019 | 2023 | 2025 (f) |
|---|---|---|---|
| Median Home Price ($000) | 274 | 417 | 429 |
| Mortgage Rate (30-yr %) | 3.9 | 7.0 | 6.9 |
| Affordability Index (100=Baseline) | 138 | 92 | 89 |
Sources: NAR, Freddie Mac, BEA.
Table 2. Housing Starts and Supply Dynamics
| Year | Single-Family Starts (000s) | Multifamily Starts (000s) | Total Vacancy Rate (%) |
|---|---|---|---|
| 2019 | 888 | 386 | 6.7 |
| 2023 | 947 | 523 | 5.8 |
| 2025 | 902 | 546 | 5.9 |
Sources: U.S. Census Bureau, NAHB.
Policy and market effects
Institutional investors own nearly 5 percent of single-family rental homes—small but influential. Zoning reform and modular construction could increase supply elasticity, yet regulatory inertia persists in many metro areas.
Leadership insight
Developers and investors should plan for smaller-unit footprints, adaptive reuse, and suburban multi-family developments. Lenders will need to diversify mortgage products and deploy credit innovations for first-time buyers.