According to Realtor.com, there are two ways Americans can return to the same level of home affordability that they have enjoyed over the past decade. Neither is immediately realistic.
In 2019, mortgage payments for median-priced homes accounted for about 21% of median household income. That share is now more than 30%, reflecting soaring home prices and mortgage rates that have nearly doubled since January 2022, according to a recent analysis of real estate listing platforms.
Realtor.com calculates that, barring a sharp decline in home prices, one of two things would be needed to bring your monthly payments back to 2019 levels.
Household income rose 56% from current $84,763 to a median of $132,171 Mortgage interest rates fell to 2.65% from 6.15% as of February 6th
Neither option is likely to materialize in the short term. According to the U.S. Census Bureau, real median household income has increased by only about 17% over the past 20 years. Mortgage rates are likely to ease from the current 30-year fixed rate, but most forecasts still have them hovering around 6% through 2026.
Even at that level, affordability benefits may be limited. The National Association of Realtors predicts home prices will rise about 4% in 2026 as new demand grows against a stubborn supply shortage.
“The U.S. housing market continues to grapple with a deep mismatch between housing supply and buyer demand,” Hannah Jones, senior economic research analyst at Realtor.com, told CNBC Make It. “If buyer demand strengthens without an accompanying increase in supply, prices are likely to rise again.”
Limited housing supply remains a challenge
A chronic housing shortage continues to put pressure on housing affordability. Realtor.com estimates there is a shortage of about 4 million homes nationwide, a gap that helps explain why lower mortgage rates and higher wage growth alone aren’t enough to deliver real home price gains.
“Subsidizing demand through artificially cheap loans doesn’t actually solve the affordability crisis,” said Jake Krimmel, senior economist at Realtor.com. To bring costs down, the supply of housing needs to better meet demand, he says.
Another Realtor.com report for 2025 says supply is struggling because zoning rules and lengthy permitting processes often limit how much new housing can be built and where it can be built.
Expanding housing supply through additional construction and policy changes remains important to alleviate affordability pressures, especially in supply-constrained markets, according to NAR.
At the federal level, lawmakers have introduced bipartisan proposals aimed at addressing zoning, permitting and construction bottlenecks, most of which are still in the early stages.
Further changes are occurring at the state level. Texas and California have passed laws loosening zoning rules and streamlining permitting, but the impact so far has been mixed.
The timeline for closing the housing supply gap also varies widely by region, according to Realtor.com’s 2025 report. The report estimates that at current rates of construction and household formation, the supply gap could be closed within three years in the South and within six and a half years in the West. The Midwest will take about 40 years. In the Northeast, current trends will not close the gap at all.
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