U.S. Housing Affordability Crisis: Income and Mortgage Rate Challenges Persist
The U.S. housing market is facing a significant affordability crisis, with median-priced homes now requiring a much larger portion of household income compared to 2019. According to a recent analysis by Realtor.com, the mortgage payment for a median-priced home now consumes over 30% of median household income, up from about 21% in 2019. This shift is attributed to a combination of sharply increased home prices and mortgage rates that have nearly doubled since January 2022. To return to 2019 affordability levels, either household incomes would need to rise by 56% to a median of $132,171, or mortgage rates would need to fall to 2.65% from the current 6.15%. However, neither scenario appears likely in the near term, as real median household income has only increased by about 17% over the past two decades, and mortgage rates are expected to remain around 6% through 2026. 
