The US housing industry is facing a historically severe affordability crisis as of October 2025. Mortgage rates remain high at around 6.3 percent, and the median sale price, last recorded in June 2024, hit a record $426,900. More than 57 percent of US households, representing 76.4 million homes, cannot afford to purchase at a $300,000 price point. This situation is being described as structurally worse than the 2008 housing bubble, with US home prices less affordable today relative to income and rates than even the peak of the 2006 market.

Despite nationwide headlines about rising inventory, the real story is muted. Official numbers show active US housing listings hovering above 1 million for five months, but national inventory actually peaked in early August and has declined since, a shift from previous years when peaks occurred in fall. The supply of homes is now around 4.6 months, up only slightly from last year. New single-family homes for sale reached 481,000, the highest since 2007, yet total inventory remains 20 to 30 percent below already low historic troughs. Most existing homeowners with low mortgage rates are still refusing to sell, forcing homebuilders to fill the gap, but not nearly fast enough.

Down payments have stabilized, with a median of $30,400 in the third quarter of 2025, more than double the typical down payment of 2019. This reflects both price growth and a tougher environment for buyers, who are still putting down around 14.4 percent of purchase price, a figure steady since 2022. Cash-rich investors and buyers of second homes are offering down payments closer to 27 percent, and competition remains strongest in the Northeast and Midwest, while markets in the South and West show some softening.

Homes are sitting longer, now on the market for a median of 62 days, and price cuts are increasing, with 20 percent of active listings seeing reductions in September. However, these price reductions do not signal a buyer’s market, but rather overpriced stock in a persistently undersupplied environment.

Compared to last year, the market feels steadier but remains defined by elevated costs and little relief for ordinary buyers. Industry leaders are lobbying for policy change and deploying incentives, but with elevated rates and the lock-in effect keeping inventory tight, the affordability crisis shows no immediate signs of resolution.

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This content was created in partnership and with the help of Artificial Intelligence AI