Why is this happening now?

Homes are sitting on the market longer. Sellers are listing more frequently. And buyers? Many are waiting on the sidelines, hesitant due to elevated mortgage rates and broader economic uncertainty. In real estate terms, the market is “softening” not collapsing. That means slower price growth, longer selling timelines, and reduced buyer urgency.

A Historical Perspective on Prices and Payments

Back in 2020, the median home price in the U.S. was $329,000, and mortgage rates averaged a historically low 3.1%. Buyers who put down 20% enjoyed monthly payments around $1,123. Fast forward to 2023, and things looked very different: the median price jumped to $492,300, mortgage rates surged to 6.81%, and monthly payments skyrocketed to $2,570 more than double what they were just three years earlier.

In 2025, there’s been some relief. The median home price has dipped to $416,900, and while rates remain high at 6.84%, the average monthly payment is now $2,183. That’s a 15% drop from 2023 levels but still a long way from the affordability of 2020.

Supply Is Up, But Demand Isn’t Following

The classic economic rule of supply and demand explains a lot here. When supply outpaces demand, prices stabilize or even fall. And right now, supply is rising. More homes are being listed. Listings are sitting longer. Foreclosures are increasing.

But demand isn’t keeping up. Economic uncertainty, particularly around tariffs and a sluggish Q1 2025 economy, is discouraging potential buyers. Some who bought recently are facing financial strain and trying to sell often for less than they paid, especially once realtor fees are factored in.

Will Lower Interest Rates Bring Buyers Back?

There’s pressure on the Federal Reserve from government leaders, including President Trump, to cut interest rates. If that happens, mortgage rates could fall and that could reheat buyer interest. But for now, the Fed hasn’t made any promises. Buyers remain cautious, and sellers may need to reset their expectations.

Government incentives could also play a role. New grant programs or tax breaks might lure hesitant buyers back into the market, but so far, such efforts remain speculative.

What to Watch Moving Forward

To get a pulse on where the housing market is headed, keep an eye on:

• New home listings
• Average time homes stay on the market
• Foreclosure rates
• New housing construction
• Broader economic performance
• Federal Reserve decisions

If supply continues to climb and demand stays stagnant, prices may keep softening. But any major economic shift especially a drop in interest rates could flip the script quickly.

Bottom Line

We’re not witnessing a housing bust. We’re seeing a market correction. After years of unsustainable growth, home prices are slowing, giving buyers a fighting chance and sellers a reality check. Whether you’re looking to buy, sell, or just stay informed, the months ahead will offer valuable insights into the future of real estate in America.

Jaspreet Singh is not a licensed financial advisor. He is a licensed attorney, but he is not providing you with legal advice in this article. This article, the topics discussed, and ideas presented are Jaspreet’s opinions and presented for entertainment purposes only. The information presented should not be construed as financial or legal advice. Always do your own due diligence.

The post Is the U.S. Housing Market Finally Cooling Off? appeared first on ROI TV.

So, how can we tackle this issue effectively?

The Affordable Housing Crisis: Why It’s Getting Worse

In recent decades, home prices have soared far beyond wage growth:

• In most urban centers, the cost of buying a home has grown much faster than average income levels.
• For younger generations, saving for a down payment has become increasingly challenging.
• The ripple effect from the last housing market crash revealed how closely real estate prices are tied to global economic stability.

Without meaningful intervention, homeownership will continue to move out of reach for millions of Americans.

Government Incentive Programs: A Well-Intentioned Boost

The Biden administration has introduced several measures aimed at improving housing affordability:

• A $10,000 tax credit for families selling homes to owner-occupants.
• A $5,000 mortgage rate offset for first-time homebuyers.
• A $25,000 bonus for first-generation homebuyers to help cover initial costs.

However, these incentives come with unintended consequences. While they help new buyers, they can also push up housing prices by increasing demand—often benefiting existing property owners more than first-time buyers.

Land Value Tax: A Radical but Promising Solution

One of the most innovative ideas to address housing affordability is a land value tax. Unlike property taxes, which are based on the value of land and buildings, a land value tax charges owners solely on the value of their land. This incentivizes:

• Maximizing land use: Encourages landowners to develop vacant properties or sell underused land.
• Discouraging speculation: Reduces the incentive to hold onto land for price appreciation.
• Economic stimulation: Could replace income taxes, encouraging investment in businesses rather than land speculation.

However, implementing a land value tax would face political resistance—particularly from large landowners and those concerned about increased government intervention.

Building More Houses: Addressing Supply Shortages

A significant part of solving the housing crisis lies in building more homes, but it’s not just about quantity—it’s about building smarter:

• The U.S. is constructing fewer homes now than in the 1970s, despite the population nearly doubling since then.
• Solutions must focus on medium-density housing—townhouses, apartments, and duplexes—particularly near city centers with access to public transport and essential amenities.
• Avoiding urban sprawl by developing housing in well-connected areas can help prevent infrastructure strain while addressing the housing shortage.

Corporate Ownership of Homes: A Growing Concern

Corporate investors have increasingly entered the housing market, often outbidding individual buyers:

• In the last quarter alone, investors purchased over 25% of all affordable homes sold in the U.S.
• This trend drives up housing prices, reducing availability for first-time buyers and middle-class families.

Possible solutions to curb corporate ownership:

• Limiting corporate ownership of single-family homes.
• Reining in predatory lending practices that favor institutional investors.
• Adjusting the financial system to favor productive business investments rather than speculative real estate investments.

Balancing Affordability Without Harming the Economy

Solving the housing crisis requires careful, multi-faceted strategies that address both supply and demand:

1. Government Incentives: These should be carefully managed to avoid driving up prices unintentionally.
2. Land Value Tax: A bold, systemic reform that could encourage efficient land use and reduce speculation.
3. Increased Housing Supply: Prioritizing building affordable, medium-density housing in well-located urban areas.
4. Corporate Ownership Limits: Restricting corporate purchases of residential properties to ensure homes remain accessible for families.

The Bottom Line: A Path Toward Affordable Housing

The affordable housing crisis won’t be solved by any one solution. It requires a combination of government policy, innovative taxation, increased housing supply, and stricter controls on speculative real estate practices.

Balancing housing affordability with economic stability is no easy task, but with thoughtful reform and proactive strategies, it is possible to create a housing market where everyone has a fair chance at homeownership. As housing becomes increasingly unaffordable, now is the time for bold solutions—before the dream of homeownership becomes entirely out of reach for future generations.

All writings are for educational and entertainment purposes only and does not provide investment or financial advice of any kind.

The post Solving the Affordable Housing Crisis appeared first on ROI TV.

Mortgage Rates and the Housing Market

Mortgage rates are primarily influenced by the federal funds rate set by the Federal Reserve, which dictates the cost for banks to borrow money. As of early 2025, mortgage rates are approximately 7%, reflecting the current economic conditions and the Federal Reserve’s monetary policy. A reduction in mortgage rates to 3% would significantly decrease monthly payments, enhancing housing affordability and potentially increasing the purchasing power of homebuyers.

Federal Reserve Bank and Federal Funds Rate

The Federal Reserve operates independently of the federal government, focusing on controlling inflation and fostering economic stability. While the President can express preferences regarding interest rates, the Federal Reserve’s decisions are based on economic indicators. Recent statements from Federal Reserve Chair Jerome Powell indicate a cautious approach to rate adjustments, emphasizing the need to manage inflation effectively.

apnews.com

Treasury Yields and Their Impact

Treasury yields, determined by market factors, inflation expectations, and economic growth projections, play a significant role in influencing mortgage rates. Higher Treasury yields often lead to increased mortgage rates as lenders seek higher returns. Efforts to stabilize inflation and promote steady economic growth could help lower Treasury yields, providing banks with the flexibility to offer more competitive mortgage rates.

marketwatch.com

Potential Actions by President Trump

While the President cannot directly alter the federal funds rate, there are several avenues through which the administration might influence mortgage rates:

• Influencing the Federal Reserve: The President can exert pressure on the Federal Reserve or consider changes in its leadership to align with desired economic policies. apnews.com
• Economic Policies: Implementing policies aimed at stabilizing inflation and fostering economic growth can indirectly impact Treasury yields and mortgage rates.
• Housing Market Interventions: Proposals such as government-subsidized mortgages or expanding existing programs could be explored to make home financing more accessible.

Housing Market Dynamics

Lower mortgage rates typically increase demand for housing, as more buyers can afford loans. This heightened demand can drive up housing prices. Conversely, lower rates might encourage current homeowners with low-rate mortgages to sell, increasing housing supply. The overall impact on the housing market will depend on various factors, including supply constraints, construction costs, and broader economic conditions.

investopedia.com

Conclusion

While President Trump’s administration has set ambitious targets for reducing mortgage rates, achieving these goals involves navigating complex economic factors and the independent actions of the Federal Reserve. Stakeholders in the housing market should monitor policy developments and economic indicators closely to make informed decisions in the evolving landscape leading up to 2025-2026.

Jaspreet Singh is not a licensed financial advisor. He is a licensed attorney, but he is not providing you with legal advice in this article. This article, the topics discussed, and ideas presented are Jaspreet’s opinions and presented for entertainment purposes only. The information presented should not be construed as financial or legal advice. Always do your own due diligence

The post Are 3% Mortgages Coming Back in 2025? appeared first on ROI TV.