There are several factors in the United States that influence the affordability of living space – and Stubbornly high mortgage lenses something felt in the whole country.
During pandemic, buyers enjoyed the mortgage interests of sub-3%, which initiated a wave of home owners. But by the end of 2023, The mortgage interests had a maximum of 8%And stay nearby today 6.5% to 7%. That – in combination with Real estate prices that are more than 50% higher than 2020– I prevented new buyers from their own homes to enter the market and sell current homeowners.
Zillow This week, the mortgage interests reported to around 4.43%to make an average home affordable for a typical buyer. But Zillow economic analyst Anushna Prakash said this was “unrealistic” Consideration of the massive dips that is necessary to get there.
But even if mortgage interests fell to 0%According to Zillow, an average home in some larger U -Bahn areas in some large U -Bahn areas would remain unaffordable.
This includes:
- new York
- Los Angeles
- Miami
- San Francisco
- San Diego
- San Jose
This is because high real estate prices are “the larger hurdle”, Michelle Griffitha luxury real estate agent with Douglas Elliman Sent in New York City, tells Assets.
“The reality is that purchasing into the market, especially in Manhattan or Prime Brooklyn, still requires a considerable amount of cash in advance,” said Griffith. “The inventory is tight and the competition is high, so that the costs for the property itself keep the most buyers on the side.”
Between May 2020 and May 2025, the Fall-Hiller House Prize Index, which is often used to measure US real estate prices for residential buildings, rose by more than 51%.
While the mortgage lenses certainly make monthly payments more expensive, according to Griffith, the affordability is “more about the total price”.
“Of course, buyers take care of prices, but what really matters is enough for the down payment and the final costs,” she added. “A small shifting of the rates does not suddenly feel this million dollar apartment.”
Another problem that contributes to the real estate crisis is a lack of cheaper inventory. Salim Chrraibi, founder and CEO of HomeBuilding Company Bluenest developmenttold Assets He sees Miami approved and motivated buyers in advance, but there are simply not enough houses in her price range. The Chrraibi company focuses on the construction of houses for families with lower and medium -sized incomes.
“Many hold on to houses for sellers because they do not want to lose the lower interest rates where they were locked up years ago, which keeps the inventory and cycle going,” he said. “The biggest problem is the inventory of the types of houses that are considered affordable for families with medium -sized incomes.”
Dealing with sticker shock
When it comes to the US market, the tip does not necessarily fix a scale the problem of affordability of living space.
Even buyers who pay all cash must “fight with a sticker”, Alexander KaltA broker with Keller Williams Bay Area Estates in California, tells Assets.
The middle house price in San Jose is Schweb Constant over 1.6 million US dollarshe said, which most households are considerably stressed before the mortgage financing costs are even taken into account. Even if the mortgage interest rates have dropped to 0%, a house in San Francisco, San Jose or somewhere else in the Bay Area would require an extremely high down payment and monthly payments, he said.
“Many buyers here are extremely sensitive to installments with every market shift and provide numbers,” said Kalla, “is the main barrier that real estate prices have massively exceeded local income since prices increased.”
According to a report by the US Finance Ministry of 2024, rents and property prices in most regions of the United States rose faster than an income in the United States. The Americans now have to make more than six numbers to afford a medium price house, so Realor.comBut the average US content is just a little more than half of it.
“Until we tackle the prices, the offer and local wage growth, the affordability remains a challenge, no matter what happens with tariffs,” said Kalla.
