Although the average 30-year mortgage interest rate is 6.2 percent—more than a half percentage point below the 6.8 percent rate averaged in the second quarter of 2025—home buying levels are at 30-year lows, and that demonstrates that "it’s not simply interest rates but high home prices that are the major barriers to housing affordability today," according to Daniel McCue, senior research associate at Harvard University Joint Center for Housing Studies.
Mortgage payments on the median-priced home in the United States are more than double what they were in 2020: For the typical first-time homebuyer loan with a 3.5 percent downpayment, mortgage costs went from $1,200 per month in 2020 to over $2,500 per month in mid-2025.
The annual income needed to afford these costs also nearly doubled from under $70,000 in 2020 to over $130,000 in 2025, pricing out millions of potential homebuyers, McCue points out. The median U.S. home price hit a record five times the median household income at last measure in 2024.
The full analysis can be found here.
