The numbers are hard to argue with. The median home price in America hit $412,000 in early 2026, according to the National Association of Realtors. A decade ago it was around $220,000. Wages over that same stretch rose maybe 40 percent. The math is brutal: the average American household now needs to spend roughly 38 percent of its income to cover a median mortgage, compared to 24 percent in 2015. Financial planners have long called 28 percent the ceiling for what’s sustainable.
Three things drove the squeeze. First, the pandemic-era buying frenzy pushed prices up fast, and sellers locked in 3 percent mortgages have no incentive to move. That’s kept inventory at historic lows. Second, construction hasn’t kept up with population growth for close to fifteen years. Zoning rules in most cities make it expensive and slow to build anything smaller than a single-family house. Third, institutional investors bought a meaningful share of available inventory between 2020 and 2023, particularly in the Sun Belt, removing those homes from the first-time buyer pool entirely.
Congress has not been idle, just not effective. The Affordable Housing Act of 2024 offered tax credits to developers who built below market-rate units, but most of the credits went to projects that were already planned. The proposed renter relief program in the same bill never made it through the Senate. The Biden-era push to break up single-family zoning at the federal level ran into a wall of local opposition. The current administration has floated reducing regulations on manufactured housing, which is a real idea, but the funding and enforcement mechanism is still being worked out as of spring 2026.
The data does point toward a few things that actually move the needle. Cities that have legalized accessory dwelling units broadly, like Seattle and Minneapolis, have seen faster inventory growth than peer cities that didn’t. States that preempted local zoning restrictions saw new permits jump 12 to 18 percent in the following two years, per a Brookings study published in late 2025. None of that is a magic fix. It takes years for new supply to show up in prices. But it’s what the evidence points toward.
Where does that leave a family trying to buy right now? Roughly 60 percent of first-time buyers are relying on family help with a down payment, according to NAR. The homeownership rate for Americans under 35 has dropped to 38 percent, the lowest since the late 1980s. The picture is not catastrophic in the way some headlines suggest, but it is genuinely hard in a way the numbers confirm.