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.

The Challenges of Affording a Home Today

For young people and first-time homebuyers, entering the housing market has never been more difficult. The affordability gap has reached historic lows, with home prices growing far faster than wages. Saving for a traditional 20% down payment has become nearly impossible for many, forcing potential buyers to delay or abandon their dreams of owning a home.

“Housing affordability is at its lowest point in history, making it difficult for young people to enter the market.”

This growing divide is reflected in initiatives like Zillow’s recent introduction of a 1% down payment loan product, an attempt to address the affordability crisis. Yet even with such measures, the gap between home prices and wage growth continues to widen, leaving many buyers stuck on the sidelines.

How Housing Market Trends Are Impacting Buyers and Sellers

The ripple effects of these affordability challenges are being felt across the housing market. The supply of affordable homes has dwindled, and despite population growth, home sales have remained low. Those who own homes are choosing to stay put, driven by the unaffordable rental market and a lack of appealing alternatives. As a result, people are staying in their homes longer, and multi-generational households are becoming more common as families combine resources to navigate high housing costs.

“Many people are staying in their current homes longer due to the unaffordable rental market, contributing to a lower supply of homes for sale.”

The impact of these trends is twofold: not only are prospective buyers struggling to find affordable homes, but sellers are also facing a market where fewer people are able to purchase. This imbalance contributes to the overall stagnation of the housing market, further complicating the dynamics of supply and demand.

The Role of Investors in the Housing Market

Investors are playing an increasingly prominent role in the housing market, contributing to rising home prices and rental rates. Large-scale investment in residential properties has driven up competition, pushing prices beyond what many individuals and families can afford. The result is a market where wealthy investors, rather than traditional homebuyers, hold a growing share of residential real estate.

“Investors are driving up home prices and rental rates, making it even harder for regular buyers to compete.”

There are concerns that the housing market may be overvalued, particularly as investor purchases begin to slow down. If investors decide to pull back or sell off properties, it could lead to sharp declines in property values, creating a new set of challenges for the market. Additionally, many wealthy families are choosing to hold onto properties as long-term investments, further reducing the supply of available homes.

Conclusion

The housing affordability crisis shows no signs of abating, as rising prices, limited supply, and investor-driven market dynamics continue to shape the landscape. For young buyers and those looking to enter the market, the road to homeownership is increasingly difficult to navigate. The impact of these challenges extends beyond individuals—affecting families, communities, and the broader economy. As the market evolves, the need for innovative solutions and policy changes will only become more urgent.

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

The post The Housing Affordability Crisis: Rising Prices, Limited Supply, and the Investor Impact appeared first on ROI TV.