The 2025 Housing Affordability Crisis in Charts: What Changed and What Didn't

Investopedia•January 3, 2026•business

Key Points:

The housing market remained largely unaffordable in 2025, with experts predicting only gradual improvements in affordability through 2026 due to flat home prices, rising incomes, and slowly falling mortgage rates.
Home inventory increased by about 25% early in 2025 but growth slowed to 10.9% by October; inventory is expected to continue rising moderately in 2026, potentially exceeding 1 million single-family home listings in summer.
Mortgage rates declined somewhat but stayed above 6%, continuing to limit buyer participation; economists forecast rates will remain near the low-6% range in 2026, keeping borrowing costs high.
Despite relatively flat prices in 2025, home prices hit record highs mid-year