Report: Homeownership Still a Stretch in 2025

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US Homeownership Remains Financial Stretch as Affordability Struggles Persist in 2025

Homeownership remains a financial stretch for many across the U.S., as prices stay near record highs, and wages lag behind rising expenses. ATTOM’s first-quarter 2025 U.S. Home Affordability Report shows that homeownership costs are consuming an average of 32% of the national wage.

This is only slightly better than last year, keeping affordability below the 28% threshold lenders typically prefer. While the national median home price dipped slightly to $351,000 this quarter, it still represents a 5.2% increase from last year, and with mortgage rates hovering near 7%, affordability remains historically low.

Major cities like Los Angeles, Phoenix, and Miami-Dade continue to experience high homeownership costs, putting the dream of owning a home out of reach for many average wage earners. With rising prices and mixed economic forecasts, home affordability remains a challenge, particularly along the coasts. For more details, visit ATTOM’s latest report on housing affordability.

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Americans’ Economic Outlook Grows More Pessimistic as Inflation and Confidence Plummet, CBS News Poll Finds

Americans’ economic outlook is showing signs of pessimism, with a new CBS News poll revealing a growing concern about a potential slowdown or recession in the year ahead. Although ratings of the economy remain unchanged, the overall sentiment is negative, reflecting ongoing challenges since the pandemic.

Rising prices continue to be the biggest factor shaping these views, with most Americans saying that inflation is still affecting their finances. Despite stock market volatility, people’s outlook on the economy doesn’t differ significantly based on market performance.

While just over half of Americans say they’re doing fairly well financially, there are stark income disparities—those with higher incomes report better financial health. Meanwhile, many continue to struggle with wages not keeping up with inflation.

As consumer confidence hits a multi-year low, concerns about retirement savings are also growing, leaving many anxious about their financial future. As we know, people do not make big financial decisions, like buying a home, when they are not confident.
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Mortgage Rates Expected to Drop in 2025 and 2026, Boosting Home Sales Outlook, Fannie Mae Forecasts

And finally, mortgage rates are expected to drop slightly over the next two years, with Fannie Mae predicting a decrease to 6.3% by the end of 2025 and 6.2% in 2026. These downward revisions have prompted a modest increase in the forecast for existing home sales in 2025, although overall home sales remain subdued.

Fannie Mae’s Senior Vice President and Chief Economist, Mark Palim, notes that this pullback in mortgage rates could provide a small boost to home sales, especially as rates are expected to decline further in the coming months.

Despite a forecast for slower economic growth, the lower mortgage rates could encourage more buyers to enter the market, particularly those who have been holding off. However, the overall outlook for the housing market remains cautious as economic conditions evolve.

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