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As The Juice gets set to deliver more bad news on housing affordability for potential homeowners, consider the scary scene playing out in expensive rental markets.
For example, in Manhattan:
It’s worse in Brooklyn:
But it’s not just happening in notoriously expensive New York.
For instance, in the Austin, Texas suburbs, 10% over asking is common, 35% is frequent and, in extreme cases, landlords are getting 50% more than the listed rent.
Pretty incredible to think that, in 38 of the nation’s 50 largest metropolitan areas, it’s actually less expensive to rent than buy. Starter homes in these cities cost $416 more per month to own than they did at this time last year, thanks to rising mortgage interest rates.
Scroll with us for some evidence that supports this data.
Looks Like The American Dream Is Dying
Don’t confuse talk of a cooldown in the housing market with more affordability.
While the pace of the ongoing increase in prices might have slowed in June, we’re still setting records.
Source: National Association of Realtors
Yes, the annual increase in the median sale price of a home slowed to a still paltry 13.4% last month. But we managed to set another record with the median hitting $416,000 in June.
This, combined with high interest rates and relatively low and/or stagnant income for large swaths of the population, indicates things might actually get worse – from an affordability standpoint – before they get better.
Consider data from a report S&P Global Ratings just put out:
That graph shows how many years it took in the past, takes right now, and will take in the future to save a 10% or 20% down payment to buy a home.
While things were much worse around the housing crash of 2008, they’re pretty bad right now. Plus, in 2008, we didn’t have the luxury of as many social media-induced dopamine rushes to make us feel better.
The report blames a confluence of factors, including:
Beyond The Down Payment
As if saving for a down payment wasn’t daunting enough, middle-income earners were already priced out of the market in Q1 of this year. By Q4/2025, S&P Global projects that 60% – yes, sixty percent – of households will not be able to afford to pay the mortgage on a typical home.
Renting Is No Relief
In the old days (not all that long ago), you heard people saying we’re renting as we save to buy a home. However, with record rent prices, this core element of the American dream might be dying – or dead on arrival – as well.
If you manage to put 10% down ($41,600) on a median priced home ($416,000) with a 30-year mortgage and a 5.5% interest rate, you’re looking at a monthly payment of $2,126. That’s not much higher than the current median for rent in the US.
It depends on whose data you believe, but median rent estimates for June range from $1,876 to $2,045. In most major metro areas, it’s safe to put this number comfortably north of $2,000.
To keep your housing payment capped at 30% of income, you need to make $80,000 a year. Median income in the US right now is closer to $50,000.
The Bottom Line: As The Juice recently noted, on housing you’re either set or screwed. Millions of US households (51% to be exact) currently carry a mortgage with a rate under 4%. This makes a big difference in terms of budget affordability.
While your options to buy a home today dwindle commensurate with how much cash you have saved and how much you earn, relatively affordable options do exist.
For example, look to up-and-coming neighborhoods. Last month, The Juice used Buffalo, New York, where housing prices vary wildly by neighborhood on the city’s West Side. Within just a few blocks – literally – your mortgage payment can change by well over $1,000 a month.
Check out that report and get creative in your own city or where you think you might want to live in pursuit of the last bastions of housing affordability. Because it appears they’re going away fast.
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