The Real Story Behind Today’s Affordability Crunch
After spending the past month breaking down the last three years of the “wait and see” market mindset, I think it’s fair to say we’re finally past the guessing phase. The housing market isn’t crashing, it isn’t on the verge of a correction, and it isn’t heading backward. Even in neighborhoods where prices have flattened, the damage (or depending on your perspective…the momentum) of a nearly 50% increase in single-family home prices since 2019 is still being digested.
And that leaves buyers, sellers, and policymakers all asking the same question: “If prices aren’t dropping and rates aren’t returning to pandemic levels… what happens next?”
As your real estate resource, my job isn’t just to tell you what the market is doing — it’s to help you understand what the market is telling us about where we’re headed so you can make smart, confident real estate decisions.
As we wrap up 2025, one theme is louder than anything else: affordability.
It’s the pressure point for buyers at all price points.
It’s the constraint for sellers.
And it’s the challenge nearly every household is trying to solve.
So I want to break down a few key forces shaping affordability right now and give some perspective on how to handle a sale or search in this new normal… and, for fun, share a few “if I ran the housing world” antidotes I wouldn’t be surprised to hear floated in 2026.
The 50-Year Mortgage?
You’ve probably seen the headlines saying “50-Year Mortgages Are Coming.” That’s not innovation — it’s desperation. Anytime you see governments or lenders exploring 40- or 50-year mortgages, it’s a sign that the math of homeownership has stopped working. Can confirm.
This isn’t new.
Japan and the UK introduced ultra-long mortgages when home prices rose far beyond what local incomes could support. In both cases, prices rose even faster, homeownership rates fell (especially for younger buyers), and affordability absolutely did not win the day.
When policymakers start stretching the loan instead of fixing the system, it’s a pretty clear signal: “We haven’t solved the root issue.”
Ingredients to Affordability
At the simplest level, affordability improves when one of three levers moves: rates drop, prices fall, or incomes grow faster than both. For the past six years, none of those levers have aligned.
Rates jumped from 3% money to 6–7% money.
Prices skyrocketed 50%+, and instead of correcting, stayed sticky due to record-low inventory.
Incomes grew — but nowhere near fast enough to offset the new mortgage math.
This explains why the market feels tight even when activity is slow.
To compound it, we’ve lost a decade of would-be homebuyers entering the market. In 2010, the typical first-time buyer spent about 12 years of adult life renting before purchasing a home (around age 30). Today? It’s 22 years (around age 40). That’s a 76% increase in the time it takes to reach homeownership. Massive shift indeed.
Put differently: we’ve added almost an entire decade of renting and waiting before someone can realistically buy their first home and get a stake in the real-estate-owning game. That single data point explains why affordability dominates today’s housing narrative.
It’s not that people don’t want to buy — it’s that the goalposts to achieving it move faster than most can keep up with.
People Are Moving for Affordability — Not Lifestyle
For decades, the top reasons people moved were upgrading their home, changing family situations, or job transfers. In 2010, “cost of living” wasn’t even measured as a reason.
Today, nearly half of all movers in 2025 cite cost of living as their primary reason for relocating.
A decade ago, people moved for a better home.
These days, 50% of people move so they can afford any home.
Migration patterns are being shaped more by affordability math than by lifestyle aspirations — which leads to my thoughts on where things might be heading.
My Take and Predictions
The solution isn’t 50-year mortgages.
It isn’t waiting for 3% rates to return.
And it isn’t hoping for a price collapse that shows no sign of arriving.
Real affordability solutions require improving supply, reducing cost barriers, and expanding access.
Zoning reform and gentle density — allowing duplexes, triplexes, and townhomes in more neighborhoods — would help. First-time buyer tax credits or cash assistance — real, upfront support that affects the monthly payment — would help a ton. Incentives for releasing underutilized land, especially in cities where land availability (not demand) is the bottleneck, would be huge. Cities with high office vacancy could rapidly create thousands of housing units. Suburbs with miles of publicly owned land sitting untouched could partner with private builders to create starter homes.
And if builders committed to producing homes near the median price, states and counties could waive regulatory fees, offer tax incentives, and speed approvals so builders aren’t losing money just to build. And that alone would take things to a whole new level of possibility!
These solutions take effort. But unlike long-term mortgages, they actually address the root causes of unaffordability. And my guess is we’re going to start hearing about a few of these proposals in a more meaningful way very, very soon.
So What Does This All Mean for Now?
The market has stabilized, the fear of a crash has faded, but the affordability challenge is the defining issue heading into 2026. This doesn’t mean buying or selling is impossible — it just means strategy matters more than ever.
This isn’t the housing market of decades past. We’re officially in a “new normal,” and for as much as I personally dislike the sound of that, it’s the people who adapt and roll with the punches who do well.
Creative deal structure, payment-focused planning, negotiation leverage, and keeping an eye on the moves the powers-that-be make to combat the #1 issue we’re not going to stop hearing about (affordability) is how we’ll make your sale or search incredibly successful.
