The End of the American Dream? Only 28% Of Homes Affordable Today, Study Shows

Core Insights - The American dream of home ownership is increasingly out of reach, with only 28% of homes in the U.S. being affordable for medium-income households [1] - High mortgage rates, which remain between 6.5% and 7%, are significantly impacting monthly mortgage payments and overall housing affordability [1][2] - Home prices have surged by 38% from $319,450 in 2019 to $439,450 in 2025, exacerbating the affordability crisis [3][4] Housing Affordability - A $400,000 mortgage at a 3% interest rate results in a monthly payment of approximately $1,600, while at a 7% rate, the payment jumps to $2,600, nearly doubling the cost [2] - To afford a $2,600 monthly payment, a household would need an income of $104,000, not including additional costs like property taxes and insurance [2] Wage Growth vs. Housing Prices - Wages have increased by 15.7% since 2019, but this growth is less than half the rate of housing price increases, leading to a decline in buying power for typical families [5] - The price range that most families can afford has decreased from $325,000 in 2019 to $298,000 in 2025 due to high mortgage rates and stagnant wage growth [4] Regional Disparities - Certain metropolitan areas, including Milwaukee, Houston, Baltimore, New York, and Kansas City, Missouri, have experienced the most significant loss of buying power since 2019 [6]