By Annie Lai, Analyst

Over the past 40 years, home prices have skyrocketed by 480%, while incomes have gone up 240%. Buying a home feels harder for our generation than it did for our parents.

The National Association of Realtors’ Affordability Index hit its lowest point in decades in 2022, due to soaring housing prices and rate hikes. Though some cities tried loosening zoning codes to unlock supply, whatever gains appeared were eroded by inflation. According to the Bureau of Labor Statistics (BLS), construction materials are up 40% since 2020, and builders are still short hundreds of thousands of workers.

Meanwhile, mortgage rates are still hovering near decades-high levels, and the Fed is not in a dovish mood. Nearly two-thirds of homeowners are locked into sub-4% loans and would rather stay put than trade up. As for potential buyers, staring down 6.5% rates and hefty down payments, most just keep waiting it out and renewing the lease.

These structural drivers are unlikely to shift in the near term, and that is why rental demand keeps holding strong and probably will. That’s well reflected in the 116,000 multifamily units absorbed in Q2 2025 (source: Cushman & Wakefield). After all, if you can’t own the house, you can still rent the dream.

Source: Statista

Source: BLS