The Real Story Behind the Affordability Crunch
After spending the past month unpacking the last three years of the “wait and see” market mindset, it’s clear we’re finally past the guessing phase. The housing market isn’t crashing, it isn’t correcting, and it isn’t heading backward. Even in areas where prices have flattened, we’re still digesting the nearly 50% jump in single-family home values since 2019.
Naturally, that has buyers, sellers, and policymakers all asking the same thing: “If prices aren’t dropping and rates aren’t returning to pandemic levels… what happens next?”
As your real estate resource, our goal isn’t just to report what the market is doing — Amy to help interpret what the market is telling us. And as we close out 2025, one theme stands above the rest: affordability. It’s the pressure point for buyers, the constraint for sellers, and the challenge nearly every household is wrestling with.
A great example is the recent buzz around 50-year mortgages. That’s not innovation — it’s desperation. Japan and the UK tried ultra-long mortgages when home prices outran local incomes. Prices rose faster, homeownership fell (especially for younger buyers), and affordability didn’t improve. Stretching the loan is a sign the system isn’t working, not a solution.
Real affordability comes down to three levers: rates, prices, and incomes. Over the past six years, none of those have lined up. Rates jumped from 3% to 6–7%, prices spiked 50%+, inventory stayed incredibly low, and incomes didn’t rise enough to keep pace. That’s why the market feels tight even in a slower year.
We’ve also added almost a decade to the timeline of becoming a homeowner. In 2010, the typical first-time buyer rented for about 12 years before purchasing. Today it’s 22 years — a 76% increase. That’s a massive shift in how long it takes just to get into the game.
Because of this, people are now moving for affordability — not lifestyle. In 2010, cost of living wasn’t even tracked as a top reason for moving. In 2025? Nearly half of movers cite it as their primary motivator.
So what does this all mean? The market has stabilized, but affordability remains the defining issue heading into 2026. Buying or selling isn’t impossible — it just requires strategy. In this new normal, the people who adapt, plan around payments, and structure deals creatively are the ones who win.