The Housing Math That No Longer Works for Most Americans

Home prices have surged far faster than incomes over the past several decades, pushing the “housing math” out of reach for many Americans and reshaping what it takes to afford a home in 2025. Tim Lucas and Craig Berry break down how the income-to-price relationship has fundamentally changed, why certain cities are far more distorted than others, and what’s driving the growing affordability gap across the U.S. housing market.Connect with Mortgage Research Network:YouTube: ⁠⁠⁠⁠⁠https://www.youtube.com/@MortgageResearchNetwork⁠⁠⁠⁠⁠Instagram: ⁠⁠⁠⁠⁠https://www.instagram.com/mortgageresearchnetwork/⁠⁠⁠⁠⁠Facebook: ⁠⁠⁠⁠⁠https://www.facebook.com/mtgresearchnews⁠⁠⁠⁠⁠Website: ⁠⁠⁠⁠⁠MortgageResearch.com⁠⁠⁠⁠⁠First Time Homebuyer Cheat Sheet: ⁠⁠⁠⁠⁠https://bit.ly/4w8CiVM⁠⁠⁠⁠⁠Homebuyer Calculators: ⁠⁠⁠⁠⁠https://bit.ly/4n0hDPv⁠⁠⁠⁠⁠Connect with a lender: ⁠⁠⁠⁠⁠https://bit.ly/426GyawIn this episode you’ll learn:How the home price-to-income ratio has changed over time: The median U.S. home price has risen from about 2.5 times median household income in 1950 to roughly 4.9 times in 2025.Where affordability is most extreme: In markets like San Francisco, home prices now exceed 12 times median household income, pricing out most middle-income buyers.Why supply shortages are a core driver: Many high-cost metros have failed to build enough housing to keep up with population and job growth, amplifying price pressure.How construction differences shape outcomes: Cities with higher building rates, like Austin, have seen more moderate pricing trends compared to supply-constrained coastal metros.The political tension around building more housing: Efforts to increase density often face resistance from homeowners concerned about property values and neighborhood change.Why high housing costs affect local economies: When housing becomes unaffordable, cities risk losing younger workers and long-term talent inflows.Which policy shifts are emerging: Some states are beginning to reform zoning laws to allow more multifamily and higher-density development.How large the housing shortage has become: Estimates range from roughly 4 million to as high as 10 million missing homes nationwide.What affordability means for first-time buyers today: Even in “more affordable” growth markets, price-to-income ratios remain well above historical norms.The big takeaway: The traditional relationship between incomes and home prices has broken down, and without significant new housing supply, affordability will remain structurally strained.Read the full article: https://www.mortgageresearch.com/articles/why-housing-is-more-expensive-than-ever/