Home Together Blog Series

The Housing Affordability Squeeze: Why So Many Can’t Buy Yet

Over the past 25 years, housing affordability in the U.S. has taken a major hit. If you’ve noticed that buying a home feels harder than it used to, you’re absolutely right. Home prices have risen far faster than incomes. While inflation-adjusted median incomes have increased by around 150%, median home prices have skyrocketed by more than 500% during the same period.

What does this mean? Well, a home that cost $120,000 in the late 1990s might now cost more than $400,000—but people aren’t making three times as much money as they were back then. This has created what experts call the "affordability gap."

One of the main reasons for this gap is supply and demand: there simply aren’t enough homes available, especially starter homes. Builders have focused on larger properties, and zoning laws along with rising material costs have slowed construction. 

The result? First-time buyers are finding it more and more difficult to find a home within their price range. With rent prices on the rise, it’s becoming even harder to save up for a down payment. This is a frustrating reality for many buyers, and I’ve witnessed it firsthand working with young clients.

In fact, over the past year, I’ve helped several 20-somethings purchase their first homes, despite all the challenges. These buyers were able to navigate the tricky market with the help of creative financing options, personalized guidance, and a bit of out-of-the-box thinking. Whether they used an FHA loan or took advantage of first-time buyer assistance programs offering down payment help, these solutions made homeownership possible. By truly understanding their needs and exploring every available resource, we were able to close on homes they were excited to call their own.

Although homeownership rates have slowly increased overall, some groups—especially young buyers—are still being left behind, and many are delaying homeownership longer than ever before. But here’s the good news: there are paths forward.

With the right strategies and support from a knowledgeable real estate agent, first-time buyers can still make their homeownership dreams come true. Creative financing, shared living arrangements, and expanded loan programs are all tools that can help buyers close the gap. It’s all about having the right guidance—whether it’s understanding government programs or leveraging new mortgage options—that can make all the difference. The journey to homeownership may be challenging, but with the right support, it’s definitely within reach.

In Part 4: First-Time Buyer Survival Guide, we’ll dive deeper into these creative solutions and how they can help you navigate the affordability gap.

Coming up next: Bigger Houses, Smaller Households: What Gives?