There are two ways to get back to the level of home affordability Americans had for much of the last decade, according to Realtor.com. Neither looks realistic anytime soon.
In 2019, the mortgage payment for a median-priced home took up about 21% of median household income. Today, it accounts for more than 30%, reflecting sharply higher home prices and mortgage rates that have nearly doubled since January 2022, according to a recent analysis from the real estate listings platform.
Barring a sharp drop in home prices, Realtor.com calculates that getting monthly payments back to 2019 levels would require one of two things:
- Household incomes rising 56% to a median of $132,171, up from $84,763 today
- Mortgage rates falling to 2.65%, down from 6.15% as of Feb. 6
Neither option appears likely in the near term. Real median household income has risen only about 17% over the past 20 years, according to the U.S. Census Bureau. Mortgage rates are more likely to ease from their current 30-year fixed rate, though most forecasts still have them hovering near 6% through 2026.
Even at that level, affordability gains may be limited. The National Association of Realtors projects that home prices will rise about 4% in 2026 as renewed demand runs up against stubborn supply shortages.
“The U.S. housing market continues to grapple with a persistent mismatch between housing supply and buyer demand,” Hannah Jones, senior economic research analyst at Realtor.com, tells CNBC Make It. “If buyer demand strengthens without a corresponding increase in supply, renewed price growth is likely.”
Limited housing supply remains a challenge
A chronic shortage of homes continues to weigh on housing affordability. There is a nationwide housing shortfall of nearly 4 million homes, Realtor.com estimates, a gap that helps explain why lower mortgage rates or stronger wage growth alone may not be enough to deliver substantial affordability gains.
“You don’t really solve an affordability crisis by subsidizing demand through artificially cheap financing,” says Realtor.com senior economist Jake Krimmel. For costs to go down, the supply of homes has to better meet demand, he says.
Supply has been slow to catch up in part because zoning rules and lengthy permitting processes often limit how much new housing can be built or where it can go, according to a separate Realtor.com report from 2025.
Expanding housing supply through additional construction and policy changes remains critical to easing affordability pressures, particularly in supply-constrained markets, according to NAR.
At the federal level, lawmakers have introduced bipartisan proposals aimed at zoning, permitting and construction bottlenecks, though most remain in early stages.
More change is happening at the state level. Texas and California have passed laws to loosen zoning rules and streamline permitting, but the impact has been mixed so far.
The timeline for closing the housing supply gap also varies sharply by region, according to a 2025 Realtor.com report. At the current pace of construction and household formation, the report estimates the supply gap could close within three years in the South and six and a half years in the West. The Midwest would need roughly four decades. In the Northeast, the gap would not close at all under current trends.
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