Why homeownership costs are so high
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Call it a dream deferred: Americans are being thwarted by homeownership costs that are near record highs, a new report finds.
Why it matters: Homeownership is a cornerstone of the American dream and the way many of us build wealth, but it is increasingly out of reach — particularly for young adults.
The latest: Housing affordability has become such a big issue that Congress — which can't seem to come together on much of anything — is close to passing bipartisan legislation to address what most agree is a housing crisis.
- The Senate is expected to vote as soon as Monday on a final version of the 21st Century Road to Housing Act, the House may pick it up Tuesday and President Trump appears to be on board.
- Spearheaded by Sen. Elizabeth Warren (D-Mass.) and Sen. Tim Scott (R-S.C.), it's a package of nearly 50 different measures intended to encourage more home building and increase affordability — including a controversial measure that prohibits large institutional investors from owning more than 350 single-family homes.
The big picture: The monthly cost of a median-priced home was $3,120 in the fourth quarter of 2025, finds the report from the Joint Center for Housing Studies at Harvard — that includes a mortgage payment, insurance and property tax. That number rises to $3,200 in today's dollars.
- And it's a roughly 46% increase from the same time in 2019 in real terms.
- Costs are even higher now than they were back in 1990, when the rate on the 30-year mortgage was more than 10%.
Zoom in: Since 2020, home prices have increased by 54% nationwide and more than 50% in 73 of the country's 100 largest metros, the report notes. A slowdown in price increases lately hasn't made a real dent.
- Mortgage rates, which had dipped below 6% before the war, are back up.
- Property taxes increased 31% from 2019 to 2025. And insurance premiums increased 72% during the same time.
Stunning stat: In a growing number of cities, a so-called starter home can now run $1 million, a recent Zillow report noted.
Zoom out: No wonder sales of existing homes are sitting at three-decade lows.
- The homeownership rate in the U.S. fell in 2025 for a second consecutive year. The largest decrease was among those under age 35.
Zoom in: Another key driver of housing demand, called household formation, is also weakening, especially for young adults, finds the report.
- That's basically the number of folks moving into their own place — out of their parents' house or a couple moving in together or someone who goes from having roommates to their own place, etc.
Between the lines: Young adults face a weaker job market and more burdensome student debt. There's also rising economic uncertainty and pessimism. (The AI sword of Damocles isn't helping the vibe.)
- Many of these folks are now doubling up or living with family instead, notes the report.
Yes, but: Buying a home now feels like a nightmare, but owning a home isn't so bad.
- Most homeowners are sitting on low mortgage rates. And inflation can be a positive for someone with a mortgage — the value of the money you owe gets inflated away, while the value of your payment also decreases in real terms. (Still, rising insurance and property taxes have left some homeowners with painfully higher mortgage payments.)
The bottom line: The dream is increasingly out of reach for young Americans.
