The ongoing increases in mortgages, combined with rising apartment rents, is making it increasingly difficult for many Americans to secure stable housing. according to a new report.
Just issued by Harvard University’s Joint Center for Housing Studies, the report contends that rising insurance and property taxes are two of the less prominently reported factors creating “cost-burdened homeowners,” a segment thought to number around 20.3 million people nationally.
Home prices have increased by a remarkable 60% in the last six years, hitting a new average high last year of $412,500.
At the same time, mortgage payments on a median-priced home have also jumped, and are today some 40% greater than where things stood in 1990. A buyer today needs an income of at least $126,700 to afford such mortgages and the “associated taxes and insurance costs.”
The rent picture appears equally gloomy. For years seen as the logical alternative to buying a house, apartment renting has become significantly more expensive with nearly 27 million renters now regarded as “cost burdened,” which means spending more than 30% of their income on housing and utilities.
The report, called State of the Nation’s Housing, maintains that “access to homeownership is further restricted by the large sums needed for a down payment, which have grown in step with rising home prices.”
A buyer, in fact, as of late 2024 would need upwards of $26,800 in cash to cover both the closing costs and 3.5% down payment on a median-priced home.
While the home price trends are formidable, the inventory of available homes have seen a undeniable increase this year, with the pool of homes up in 98 out of 100 metro areas surveyed.
And some of those homes are now reflecting the needs of current consumers, with builders completing smaller homes with less amenities to offer them at lower prices. “The median size of a new single-family home declined for the third consecutive years in 2024,” says the report, dropping to 2,150 square feet.
“Many builders have also cut prices or offered mortgage rate buydowns to facilitate sales,” the report adds.
Ultimately, overall high home prices and apartment rents may level out some in the months to come, rather than displaying the dramatic spikes of the last three years, the report asserts.
June 27, 2025
By Garry Boulard
