Housing Affordability Crisis Persists Despite Some Signs of Improvement

Experts see gradual, uneven progress as high prices, mortgage rates, and limited supply continue to hamper buyers

Published on Feb. 19, 2026

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The U.S. housing market remains challenging for many prospective buyers, with high home prices, steep mortgage rates, limited inventory, and rising insurance costs creating significant affordability hurdles. However, some experts see signs of gradual improvement, including moderating price growth, more inventory, and lower mortgage rates, though the recovery is expected to be uneven across different regions.

Why it matters

The housing affordability crisis has far-reaching implications, making it difficult for many Americans to achieve the dream of homeownership and contributing to broader economic and social challenges. Understanding the factors driving this crisis and potential paths forward is crucial for policymakers, industry stakeholders, and the public.

The details

A combination of factors has contributed to the housing affordability crisis, including continued high home prices, steeper mortgage rates, prolonged inventory shortages, and steep property tax and insurance bills. Home prices are up roughly 60% nationwide since 2019, pushing the median existing single-family home price to around five times the median household income, well above the traditional affordability benchmark. Mortgage rates have also surged, jumping 82% in the past five years, while incomes have risen only 26%. Labor shortages in the construction industry, increased building material costs, and the presence of institutional investors have further exacerbated the supply-demand imbalance.

  • In October 2025, the median sales price for all housing types was $415,200, an increase of 2.1% from one year prior.
  • Home prices rose in 77% of metro areas — 176 of 230 — during the third quarter of 2025, up from 75% in the previous quarter.
  • Around 4% of metro markets posted double-digit gains in the third quarter of 2025, slightly below the 5% recorded in the second quarter.

The players

Nadia Evangelou

Senior economist and director of Real Estate Research for the National Association of Realtors (NAR).

Albert Lord

Founder and CEO of Lexerd Capital Management.

Beth Swanson

Insurance analyst at The Zebra.

Dennis Shirshikov

Professor of finance and economics at Queens College, CUNY.

Rick Sharga

President and CEO of CJ Patrick Company.

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What they’re saying

“Affordability has weakened because mortgage rates surged while we were already short on homes. We have underbuilt for years, so buyers are still competing for too few listings. Inventory has improved, but not at the prices people actually need it to be. Right now, middle-income buyers can afford only about 21% of listings, and we are still missing roughly half a million homes priced at or below $260,000. Until the market adds homes at those price points, affordability will remain tight.”

— Nadia Evangelou, Senior economist and director of Real Estate Research for the National Association of Realtors (NAR)

“Insurance has become more expensive and, in some regions, harder to secure due to climate-related risks. The data show higher-frequency, higher-severity events in recent years. Losses like these translate into higher insurance premiums, stricter underwriting, or in some areas, fewer insurers willing to write new policies.”

— Beth Swanson, Insurance analyst at The Zebra

“Just a few years ago, the talk about what was preventing Americans from gaining a foothold in the housing market centered on student debt, down payments and price appreciation. Today, however, another growing impediment is economic confidence. House hunters are asking themselves: Am I willing to buy when so much else feels wrong?”

— Dennis Shirshikov, Professor of finance and economics at Queens College, CUNY

“They're not willing to give up the 2.5% to 3.5% mortgages they secured a few years ago to trade up to a bigger, more expensive home with a 6.5% mortgage today.”

— Rick Sharga, President and CEO of CJ Patrick Company

“Price momentum has cooled, listings are rebuilding, more builders are offering incentives like rate buy-downs to buyers, and rates are easing, creating more choices for first-time buyers. I expect gradual, uneven improvement into 2026, with rates remaining in the low 6% range, flatter home prices and modest inventory gains.”

— Selma Hepp, Senior vice president and chief economist for Cotality

What’s next

The judge in the case will decide on Tuesday whether or not to allow Walker Reed Quinn out on bail.

The takeaway

The housing affordability crisis remains a significant challenge, with high prices, steep mortgage rates, and limited supply continuing to price out many prospective buyers. However, some experts see signs of gradual improvement, including moderating price growth, more inventory, and lower mortgage rates, though the recovery is expected to be uneven across different regions. Addressing the underlying factors driving this crisis, such as supply-demand imbalances and climate-related risks, will be crucial for improving housing affordability in the long run.