Housing Market Hits Troubling Milestone for First Time in Nearly 20 Years
Newsweek AI is in beta. Translations may contain inaccuracies—please refer to the original content.
Buying an entry-level home in the U.S. now costs more than twice as much per month as renting, according to a new study by John Burns Research and Consulting (JBREC)—showing that the housing affordability gripping the country is far from easing up despite rising inventory.
It is the first time in nearly 20 years, since 2006, that the monthly cost of owning an entry-level home is more than double the average apartment rent in the country—a grim reminder of a time when the U.S. housing market was on the cusp of collapsing.
Why Is Homeownership So Expensive Now?
According to JBREC, an entry-level home is defined as one in which the price band is at the lower end of the spectrum. They usually offer first-time homebuyers the best opportunity to step on the property ladder.
The cost of owning an entry-level home was calculated by researchers as including a 5 percent down payment, a 30-year fixed-rate mortgage, interest, taxes and insurance, plus any maintenance work—which can range from 0.85 percent to 1.25 percent of the home price.
Considering that mortgage rates are still hovering around the 7 percent mark, it is easy to understand the challenges facing first-time homebuyers. As of June 26, according to Freddie Mac, the average 30-year fixed-rate mortgage—the most popular among American homebuyers—was at 6.77 percent, down by only 0.09 percentage points from a year earlier.
Modern new homes under construction in Portland, Oregon.
Modern new homes under construction in Portland, Oregon.
Getty Images
Meanwhile, home prices are still growing, even as sales are falling in the face of longstanding affordability challenges—including rising homeowners association (HOA) fees and home insurance premiums. According to Redfin, the median sale price of a single-family home in the U.S. in May was $462,206, up 0.5 percent from a year earlier.
The rental market, on the other hand, is much more affordable. The median U.S. asking rent dropped 1 percent year-over-year in May to $1,633, according to Redfin, as more supply gave tenants more power to negotiate. In a city like Austin, Texas, where there has been a surge in new multi-family construction over the past five years, asking rents were down by 9 percent—the lowest level since 2021.
Currently, the JBREC analysis found, the national cost of owning an entry-level home is 101 percent higher than renting an average apartment. The gap has been growing since the pandemic: in 2020, owning cost 39 percent more than renting; in 2021, 44 percent more; in 2022, 78 percent more; in 2023, 93 percent more; and in 2024, 97 percent more.
For the first time since 2006, purchasing an entry-level home costs more than twice as much per month as renting. 🫥 pic.twitter.com/mwta7zwgYy — John Burns Research and Consulting (@JBREC) July 2, 2025
JBREC researchers project that this gap will shrink in coming years, all the while remaining historically high, with the cost of owning an entry level home estimated as 91 percent higher than renting in 2026, 93 percent in 2027 and 95 percent in 2028.
Plummeting Confidence in the Future
JBREC announced the result of its findings on social media, where it asked users when they think owning a home would once again feel affordable for buyers in the U.S.
A majority of the roughly 450 people who voted (42.1 percent) said, "not anytime soon." About 30 percent believe that homeownership may become affordable again in three to five years, while 16.3 percent said it might happen within two years. Roughly 12 percent said it won't be the case before 2031, at least.
Americans are just as pessimistic about the affordability of housing in the U.S. in the present. Homeowners' calls to lawyers about foreclosure have reportedly soared to a five-year high, with a recent LegalShield survey showing that more than 70 percent of homeowners and prospective buyers worry about a potential recession hitting the country in the coming months.
These fears could bring about a further slowdown in demand in the housing market, which might finally bring down prices. According to Redfin, home prices will drop by a modest 1 percent by the end of 2025.
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Miami Herald
40 minutes ago
- Miami Herald
Ford recalls over 200,000 cars for major safety concern
Getting your driver's permit is one of the most freeing feelings for many young adults. It marked the first time in many of our lives that we got to step out into the world and be somewhat independent, since we no longer needed to beg our parents for a ride. The most memorable part was getting our first car, and for many who grew up in the U.S., Ford was likely the make. Don't miss the move: Subscribe to TheStreet's free daily newsletter Ford is one of the oldest and most iconic American automakers, with a legacy spanning over 12 decades. Unlike its competitors, it's one of the few that has remained an American-made car brand. This company is known for producing well-equipped vehicles at competitive prices, delivering value to consumers. This is highly appealing amid an uncertain economic climate that has caused consumers to become more conscious of their spending. Related: Tesla unveils an unusual innovation to win back customers And with the looming tariffs, Ford is among those better positioned, since around 80% of its vehicles are manufactured in the U.S. However, even advanced technology isn't immune to human error, and Ford has faced a huge mishap. Image source: Olson/Getty Images Ford (F) is recalling over 200,000 vehicles due to a software failure that causes the back camera of its cars to malfunction. The defective cameras will either display a blank screen, preventing the driver from getting complete rearview visibility, or continue to show the image even after the driver has finished using it, creating significant confusion. More Retail News: Major grocery chain using self-driving robots for deliveriesHome Depot spends billions on major acquisitionWalmart makes deal to open popular food chain in stores This defect is highly concerning because it increases the chances of a crash, putting the lives of thousands of car owners at risk. To solve the problem, Ford dealerships will update the rearview camera software at no cost to the owners. In the meantime, Ford will notify all vehicle owners who might have been affected by July 28. If you acquired a Ford or Lincoln vehicle between 2019 and 2024, here is a list of all the makes and models that are being recalled. Ford: Bronco Sport, model years 2021-2024 EcoSport, model years 2020-2021 Edge, model years 2019-2020 Escape, model years 2020-2022 Expedition, model years 2020-2021 Explorer, model years 2020-2024 F-150, model years 2019-2020 F-250 SD, model years 2020-2022 Fusion, model years 2019-2020 Maverick, model years 2022-2024 Mustang, model years 2019-2023 Ranger, model years 2019-2023 Transit, model years 2020-2023 Transit Connect, model years 2018-2022 Related: Rivian sends hard-nosed message to employees Lincoln: Aviator, model years 2020-2023 Continental, model years 2019-2020 Corsair, model years 2020-2022 MK2, model years 2019-2020 Nautilus, model years 2019-2020 Navigator, model years 2020-2021 If your vehicle is among the ones mentioned in the list above, you may call Ford customer service at 1-866-436-7332 using the recall number 25S72. You can also contact the National Highway Traffic Safety Administration vehicle safety Hotline at 1-888-327-4236 (TTY 1-888-275-9171) or visit the official website at Related: Veteran fund manager unveils eye-popping S&P 500 forecast The Arena Media Brands, LLC THESTREET is a registered trademark of TheStreet, Inc.
Time Business News
an hour ago
- Time Business News
How to Buy a Home in California and Sell Your Current Home at the Same Time
Buying and selling a house at once is always a delicate balancing act, but the stakes are even greater in California. Competition is intense, and prices are exorbitant given a statewide housing shortage of 3.4 million units. Median house values in many coastal areas exceed $1 million, and only 17% of Californians can afford a median-priced home. Especially if you are also selling your existing house, approach your plan to Buy a Home in California with strategy, speed, and accuracy. Buying or Selling First: What's the Smarter Move? Buying Before Selling: In a competitive environment like California, this strategy would appeal to many buyers who dread missing out on the right house. Pros: 1. Lock in the Right House Quickly: Inventory remains tight—active listings in California were about 30% lower as of early 2024 than pre-pandemic levels (Redfin). When you're ready to Buy a Home in California, buying before selling allows you to strike faster when the right property arises. 2. Skip the Double Move and Storage Expense: Buying Before Selling allows you to move into your new house. If you buy first, you'll skip the expense of short-term rentals and storage, reducing hassle and cost. 3. More Flexibility in Transition Time: Most closings give you 30–60 days before the transaction becomes final, which means you have time to plan, remodel, move in, etc., at your own pace. Cons: 1. Risk of Dual Mortgages: As of mid-2024, mortgage rates were near 7% (Bankrate). The burden of two mortgage payments while you wait for your home to sell could increase your payments significantly. 2. Complicates Financing: If you Buy a Home in California before selling, you may need alternative financing, such as a Bridge loan HELOC This temporarily raises your debt-to-income ratio (DTI) while you wait for your current home to sell, which can affect the approval of your loan. 3. Pressure to Sell Fast: If you are financing two homes simultaneously, you may end up negotiating with buyers for lower prices or less advantageous conditions because of the urgency of completing your sale. Selling Before Buying For most homeowners, selling before buying makes the most sense regarding finances and may provide a stronger negotiating position. Advantages: 1. Access to Equity: Selling before you buy releases home equity, part of over $32 trillion in home equity as of Q4 2023 (Federal Reserve), which you can then use as a down payment when you buy a home in California. 2. Better Mortgage Terms: With less debt rated through DTI and more cash reserves, lenders may offer better rates. Additionally, your offer is likely more appealing to sellers if they don't have to wait for your house to sell. 3. Avoid Dual Expenses: Avoid the risk of paying two mortgages, bills, and taxes, which creates more space for financial planning. 4. Stronger Purchase Offer: Being mortgage-ready with cash in hand helps in California's multiple-offer bidding wars—crucial if you're looking to Buy a House in California, where sales prices will likely exceed asking prices. Disadvantages: 1. Temporary Housing: Without a new home under contract, you may need to rent something or live with family, which is an inconvenience but sometimes a necessary step. 2. Double Moving Expense: Two moves and potential storage space can be expensive. A local move averages about $1,250, and long-distance moves averaging about 1,000 miles run $4,500 and $5,000 on average(Source). How to Successfully Buy a Home in California and Sell at the Same Time?1. Analyze Your Situation Work with an experienced real estate agent adept at helping clients buy and sell. They can help you analyze the current market and real estate values as you assess timing and outlook—while keeping both transactions in sync. 2. Understand When to Use Contract Contingencies If your next purchase will rely on the proceeds from your existing home, you should convey a home-sale contingency. This may protect you financially but weaken your offer if there is competition for the property. Your odds improve when you have a good home priced appropriately in the market and ready to show. 3. Think about a bridge loan Bridge loans provide short-term financing by leveraging equity in your current home to fund the next. They're ideal when you need flexibility but come with short terms, higher rates, and strict qualification requirements. 4. Plan Budget You may include taxes, relocation expenses, and, if necessary, short-term housing in your budget beyond the price of the home. A financial cushion ensures you're covered if closings don't align. Explore rent-back arrangements or temporary housing alternatives to handle discrepancies between transactions. Conclusion Choosing to Buy a Home in California while selling your current one can be complex—but with expert guidance, it's achievable. Trust Kim Eckert Homes to streamline your journey with smart strategy, timing, and support—helping you buy and sell seamlessly, even in California's competitive housing market. TIME BUSINESS NEWS
The Hill
an hour ago
- The Hill
Trump orders Interior to look at raising revenue at national parks
President Trump ordered the Department of the Interior to look at raising revenue at national parks by increasing entry fees for foreign tourists. Trump signed an executive order Thursday directing Secretary of the Interior Doug Burgum to develop a 'strategy' to boost revenue and improve recreational experiences at national parks around the country by hiking entrance fees and recreation pass fees for foreign tourists. The White House said that by raising prices, national parks will become more affordable for American families. The order does not specify how much the prices would go up or when they would be implemented. The administration argued that additional revenue will 'fuel investment in our national parks, reduce the maintenance backlog, construct critical infrastructure improvements and support conservation projects that improve our majestic national parks.' The White House said that increasing fees for foreigners visiting the parks will 'ensure fairness.' 'American citizens fund national parks and public lands with their tax dollars, yet they are currently charged the same rate as foreign visitors who do not pay taxes, meaning that American citizens pay more to see their own national treasures than foreign visitors do,' the White House said in the fact sheet. The executive order comes as the administration has proposed a 30 percent cut to National Park Service staffing budgets and service operations. The proposed reductions have troubled some Republicans in Congress. 'We want to have some discussions on it and exactly how it's going to affect the park service and exactly what units the states are going to take over management. … We need more information,' Rep. Mike Simpson (R-Idaho) told The Hill in early June.
