Core Insights - Soaring home prices and elevated mortgage rates are significant issues in America, with the recent Federal Reserve rate cut not leading to expected decreases in mortgage rates [1][2] - Long-term borrowing costs are influenced more by concerns about inflation and federal deficits than by Federal Reserve policy [2][3] - The average rate on a 30-year fixed mortgage has increased from below 3% to over 6%, with historical context indicating that higher rates have been common in the past [3] Housing Market Dynamics - The typical U.S. household would need an annual income of approximately $118,530 to afford a median-priced home of $402,500, which is over 50% higher than the current median household income of about $77,700 [4] - Given the current economic conditions, buying smaller homes may become a necessity for many households [4][5]