Let’s break down the numbers. Back in 2020, the median home price in America was $387,000. Fast forward to April 2025, and that number has jumped to $585,000—a staggering 50% increase in just five years. But the real shocker? Monthly mortgage payments have more than doubled, rising 115% from $1,373 in 2020 to nearly $2,950 today. That’s the combined effect of skyrocketing prices and significantly higher mortgage rates.

Incomes haven’t kept up. Median income in the U.S. has only grown about 20% in that same timeframe. That mismatch between income and housing cost is the root of the current affordability crisis—and it’s forcing many would-be buyers to either wait or walk away entirely.

A huge part of the affordability issue lies in interest rates. The average 30-year mortgage rate in 2020 was around 3.4%. In 2025, we’ve seen rates range from 6% to as high as 12%, depending on the borrower and loan terms. That kind of increase means homebuyers are paying thousands more each year just in interest.

So what could fix this? If the Federal Reserve decides to lower interest rates later this year—a decision President Trump and Jerome Powell are actively discussing—we could see mortgage rates dip as well. If rates drop closer to 5%, it might reignite buyer demand and even push home prices back up again. But for now, those rate cuts remain speculative, and inflation, tariffs, and overall economic conditions will influence whether or not they happen.

Even if rates do fall, housing prices don’t drop quickly. Sellers rarely slash prices overnight. Most prefer to wait for a better offer or reduce their asking price in small increments. That’s why housing markets typically recover faster than they decline, and why buyers hoping for a major crash might be waiting longer than expected.

Beyond the numbers, there’s a broader conversation to be had about how our financial system works—and who it’s really working for. Many people feel the system is rigged to keep them behind. With limited financial education, rising debt, and soaring housing costs, it’s easy to feel like homeownership is slipping out of reach. And for some, it is.

That’s why I believe it’s more important than ever to understand that the home you live in is not necessarily an investment—it’s a liability. Yes, it provides stability. Yes, it can appreciate. But real wealth is built by investing outside your primary residence—in stocks, in income-generating real estate, or in businesses.

If you’re thinking about buying right now, here’s my advice: don’t try to time the market. Buy a home you can actually afford. Don’t overextend yourself on a variable rate. And don’t fall into the trap of thinking your dream house will make you financially secure. It won’t.

What will? Living below your means. Investing smart. And staying informed. The market will shift. Rates will rise and fall. But your financial stability depends on how you play the long game.

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 Can You Still Afford a Home? What Rising Rates and Prices Mean for Buyers in 2025 appeared first on ROI TV.

Home Prices

As of January 2025, the median home price in the United States reached approximately $420,000, marking a 4.1% increase from the previous year. This growth rate aligns closely with the long-term average appreciation rate of 3.4%, suggesting a stable yet modest rise in property values. Notably, all 50 of the largest metropolitan areas have experienced year-over-year price growth, a trend reminiscent of the housing boom during the pandemic period.

marketwatch.com

Inventory Levels

The housing inventory has seen an 11% increase from the previous year, with about 900,000 active listings as of January 2025. This figure represents a 50% rise from 2022 levels; however, it remains below the pre-pandemic inventory levels observed in 2019. The gradual increase in available homes indicates a slow return to more balanced market conditions. Regional variations persist, with areas such as Texas, Florida, and Colorado reporting inventory levels that have surpassed pre-pandemic figures.

wsj.com

Mortgage Rates

Mortgage rates have demonstrated relative stability since the 2024 election, with the average 30-year fixed-rate mortgage hovering around 6.87% as of February 2025. This marks the lowest level since December 2024, offering potential relief for homebuyers as the market approaches its busiest season. Despite this decline, rates remain elevated compared to historical lows, contributing to affordability challenges for many buyers. Economic factors, including potential tariffs and inflationary pressures, continue to influence rate fluctuations, underscoring the importance of monitoring these elements when making purchasing decisions.

marketwatch.com

Demand for Housing

Despite higher mortgage rates, demand for housing remains robust. Indicators such as the mortgage purchase index have shown stable demand over the past 15 to 18 months. Similarly, Redfin’s demand index indicates that buyer interest has remained relatively unchanged year-over-year, with only a 1% decrease. This resilience suggests that, even in the face of affordability concerns, many buyers are motivated to enter the market, potentially sustaining price stability in the near term.

Mortgage Delinquency Rates

While overall mortgage delinquency rates for conventional loans remain low, there has been a slight uptick in delinquencies among FHA and VA loans, which typically require lower down payments. As of Q1 2025, FHA mortgage delinquencies have risen above 2019 levels, indicating potential financial distress within this segment of borrowers. However, serious delinquencies and foreclosure rates have remained steady year-over-year. This trend warrants close observation, as it may signal emerging vulnerabilities in the housing finance system.

Market Outlook

Looking ahead, industry analysts project that home prices will continue to experience modest growth. The CoreLogic HPI Forecast anticipates a 4.1% year-over-year increase in home prices from December 2024 to December 2025. While inventory levels are gradually improving, they remain below historical norms, suggesting that supply constraints may persist. Mortgage rates are expected to stabilize around 6.5% throughout 2025, contingent upon broader economic conditions and Federal Reserve policies. Potential buyers and investors should stay informed of these trends and consider both national and regional dynamics when making real estate decisions.

corelogic.com

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

The post Shifts in the Housing Market in 2025 appeared first on ROI TV.