Study Finds Only 1 in 8 Renters Can Afford a Median-Priced Home, Highlighting Housing Market Challenges

Homeownership is slipping further out of reach for millions of U.S. renters.

Since 2019, about 1.8 million U.S. renter households have lost the ability to afford a median-priced home, and the share of renters who can buy has dropped from 17% to 12.7%, according to a recent Coldwell Banker Richard Ellis (CBRE) study. High prices and mortgage rates are primarily to blame, but there are signs that affordability may soon start to improve, said Travis Deese, associate director of multifamily research for CBRE.

Homeownership Out of Reach

CBRE estimated the cost of owning a home, including mortgage, insurance, taxes, and general maintenance, and compared it to rents in major U.S. cities. A home was considered affordable if monthly costs didn’t exceed 40% of gross income. By this measure, just 1 in 8 renter households could afford a median-priced home in Q2 2025.

The decline in home affordability varied by city. For example, markets that experienced the largest drop in the percentage of households that can afford homeownership include Tampa (-10.1 percentage points), Washington, D.C. (-9.0), and Austin (-8.3). Meanwhile, Denver, New York, and Chicago saw small changes due to income increases and stabilizing or declining home prices.

What’s Driving Declining Affordability?

“The largest driver of the current spike in unaffordability has been a combined effect of increased home prices from interest rates that went incredibly low during the pandemic, along with a spike in interest rates subsequently to combat inflation,” Deese said. “When the rates went low, the prices went up, but when the rates went up, the prices did not come down in lockstep and instead remained sticky. This created a substantially larger monthly payment when accounting for principal, interest, taxes, and insurance.” 

In Q2 2025, buyers of a median-priced home paid an average of $4,643 per month—more than double the average rent of $2,228. That gap, known as the buying premium, was 108%, down from 128% at the end of 2023. 

While that marks an improvement, it’s still far above the pre-pandemic average buying premium of 68%. So buying is slightly more affordable than it was two years ago, but still much costlier than before the pandemic.

The Housing Market Ahead

While the future is uncertain, Deese expects home affordability to get better from here.

“Over time, the for-sale market will likely become slightly more affordable as prices are likely to not see any notable appreciation until incomes catch up,” he said. “People cannot buy what they cannot afford. Additionally, as interest rates are relaxed, this could induce more people to sell their homes, unlocking more inventory, adding competition [to] the for-sale market.” 

This would put downward pressure on home prices, but significant changes in affordability are likely to take years. Deese expects the gap between buying and renting to shrink toward its pre-pandemic average of 67%—but says it’ll take years of slow, natural market shifts to get there.