Nationwide picture:
As we approach 2025, 74.9% of U.S. households cannot afford a median-priced new home ($459,826), given a typical 30-year mortgage rate of 6.5% New York PostRealtorNational Association of Home Builders.
State-level extremes:
Montana—once considered affordable—now tops the affordability crisis list. Median home prices ($649,900) vastly outpace median incomes ($72,066), meaning buyers would need to earn ~$171,301 annually to qualify Investopedia.
California remains among the toughest markets. In Q2 2025, an estimated 15% of residents will be able to afford a median-priced home (~$905,680), down from 17% the previous quarter but slightly up from 14% of the previous year. The required annual income to qualify reached $232,400 PR Newswire.
Meanwhile, Harvard’s State of the Nation’s Housing 2025 report describes affordability as a core crisis—record-low sales, rising insurance and taxes, mounting rental burdens, and risks from climate-related disasters compound the strain on households Harvard Joint Center for Housing Studies+1.
Why affordability is lagging:
- High prices persist.
- Interest rates remain elevated.
- Stacks of costs—insurance, taxes—add to burdens.
Yet there’s a silver lining: some markets are seeing price drops and incentives (see Business Insider data), offering targeted relief for prepared buyers Business Insider.
