In spite of slowing sales, home prices inch higher

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Home prices remain historically high while insurance and property taxes surge, pushing U.S. home sales to a 30-year low.
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Half of all renters are now cost-burdened, with severe rent burdens rising even among middle-income households.
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Amid record homelessness and mounting construction costs, reduced federal aid and policy uncertainty threaten to worsen the crisis.
The latest report from S&P CoreLogic shows home prices increased in April at a slower pace than in March. But thats a small consolation for the increasing number of buyers who are still priced out of the U.S. housing market.
That market is facing unprecedented levels of stress, with affordability now at record lows, according to a comprehensive new report from the Harvard Joint Center for Housing Studies. The State of the Nations Housing 2025 paints a sobering picture of a market where both renters and homeowners are being squeezed by rising costs, falling purchasing power, and dwindling government support, while the specter of economic downturn looms.
Home prices up, sales down
The median price of a single-family home in 2024 reached a staggering $412,500, up 60% since 2019 and now five times the median household income.
This far exceeds the traditional affordability benchmark of three times income, said Daniel McCue, a senior researcher at the Center.
It should come as no surprise that existing home sales dropped to their lowest level in three decades, as fewer households can compete in the current market. New home sales rose modestlyby 3%but only after builders pivoted to smaller homes and offered mortgage buydowns.
Meanwhile, monthly mortgage payments for a median-priced home now top $2,570, pricing out all but the highest-earning renters. As a result, the national homeownership rate fell for the first time in eight years, and longstanding racial homeownership gaps persisted or worsened.
Rents soar, burdens multiply
Renters arent faring any better. In 2023, the number of cost-burdened renters those spending more than 30% of income on housing hit 22.6 million. More than 12 million are now severely burdened, spending over half of their income on rent.
Alarmingly, burden rates have surged even among middle-income earners, with over 70% of renters earning $30,000$44,999 now classified as burdened.
While rental housing supply grew over 600,000 multifamily units were completed in 2024, the most in nearly 40 years these new units primarily served the high-end market. Affordable rentals remain in short supply.
Homeowners also face increasing financial pressure from rising property taxes and sharply escalating insurance premiums, up 57% since 2019. In high-risk climate areas such as California, Florida, and Louisiana, some insurers have exited the market altogether, compounding homeowners difficulties. Property taxes have risen by an average of 12% since 2021.
This is a pivotal moment, said Chris Herbert, the Centers managing director. Without bold, coordinated action, the affordability and supply crises will continue to spiralharming the economy and millions of Americans striving for a stable home.
Posted: 2025-06-25 12:35:18