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Buying a house feels unusually painful because several costs moved against first-time buyers at the same time: prices are higher, mortgage rates are well above the 2010s norm, inventory remains limited, and insurance and other ownership bills add to the payment. The Congressional Research Service put the 2025 real median existing-home price at $414,300, 21% above its 2019 level. Thirty-year mortgage rates averaged 6.05% to 6.67% during the first eight months of 2026, while the average never exceeded 5% from 2011 through 2021. Your parents may be remembering a purchase made under a very different price-and-rate combination, often followed by years of equity growth or a mortgage that is now paid off.
Why is buying a house so hard now?
The short answer is that the price, financing, supply and carrying-cost parts of the housing budget all became less forgiving together. A household can earn a good salary and still fail the affordability test when those pressures compound.
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The Congressional Research Service (CRS) reports a 2025 real median existing-home price of $414,300, 21% above the 2019 real median. In the nominal series, the median rose from $271,900 in 2019 to $414,300 in 2025. A buyer therefore needs more cash or more borrowing power before interest, taxes or insurance are considered.
Mortgage rates changed the payment for the same house
Thirty-year fixed rates averaged between 6.05% and 6.67% in the first eight months of 2026, according to CRS. From 2011 through 2021, the annual average never exceeded 5% and at times fell below 3%. A rate several percentage points higher can turn an otherwise manageable loan into a payment that fails a lender’s qualification or leaves too little room in the household budget.
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There still are not enough homes in many markets
About 1.7 million homes were for sale at the end of 2025. That was the fourth consecutive annual increase, but the level remained below every year from 1995 through 2019. Single-family housing starts and completions also remain below their pre-2007 levels. Limited choice keeps buyers competing for a small set of homes, while the national figures can conceal even tighter conditions in a particular metro area or for a particular type of home.
Why can my parents afford a house when I cannot?
Parents may be comparing today’s purchase with a home they bought years ago, after prices rose and their mortgage balance fell. The Federal Reserve’s 2025 household survey, published in 2026, shows how strongly ownership varies by age and income.
| Group | Homeownership rate |
|---|---|
| Adults ages 18–29 | 24% |
| Adults ages 30–44 | 58% |
| Adults ages 45–59 | 76% |
| Adults ages 60 and older | 83% |
| Family income below $50,000 | 33% |
| Family income of $100,000 or more | 86% |
The Fed says older adults are more likely to own partly because they bought during their working years and are less dependent on current earnings. Among households with income below $50,000, 39% of adults age 60 or older owned their home free and clear, compared with 10% of those under 60. That distinction matters: a parent who has substantial equity or no mortgage is judging affordability from a different balance sheet than a first-time buyer assembling a down payment today.
This is a structural difference, not proof that every older homeowner had an easy purchase or that every younger household is shut out. Prices, rates and local markets varied across generations and still vary sharply from one place to another.
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What does a monthly housing payment really include?
The mortgage principal-and-interest quote is only one part of the ownership budget. The Federal Reserve found a median monthly mortgage payment of $1,600 in 2025, up from $1,500 in 2024; among recent movers, the median was $2,300.
Use four tests instead of one payment number
| Test | Question to answer |
|---|---|
| Price-to-income | How large is the local purchase price relative to your household income? |
| Rate sensitivity | What happens to the payment if the available rate is one percentage point higher or lower? |
| Cash at closing | Can you cover the down payment, closing costs, reserves and moving expenses without exhausting your cash? |
| Recurring costs | What will property taxes, insurance, maintenance, utilities and any homeowners-association charges add each month? |
The National Association of REALTORS’ Housing Affordability Index combines median income, median home price, mortgage rate and a 20% down-payment assumption to ask whether a typical family can qualify for a typical home. That assumption is a measurement convention, not a promise that every buyer will need or have 20%. Your own loan program and local costs can produce a different result.
Insurance can upset an otherwise workable budget
More than six in 10 insured homeowners told the Federal Reserve that insurance costs had risen more than they expected in recent years. Six percent of homeowners reported going without insurance in 2025. A payment that looks affordable before insurance is not an affordable ownership plan if the actual premium, deductible or coverage requirement leaves no room for repairs and other bills.
“Housing represents the largest expense for most families, and consequently, housing decisions have the potential to substantially affect economic outcomes.” — Board of Governors of the Federal Reserve System, Report on the Economic Well-Being of U.S. Households in 2025 (published 2026)
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How does rent make saving for a down payment harder?
Renters are trying to build purchase cash while housing already consumes a large share of their income. The CRS reports a 2025 inflation-adjusted median asking rent of $1,492, nearly 18% above 2019; in nominal terms, asking rent rose from $1,005 to $1,492.
The Federal Reserve found that 23% of renters were behind on rent at some point in 2025. The share reached 33% among renters with income below $25,000. Falling behind can mean depleted savings, damaged credit or both, making the next down-payment milestone harder even when a household’s income later improves.
Does the national housing data describe my market?
Not by itself. CRS cautions that national supply and price indicators hide major differences by metro area, state and housing type. A national median can understate the burden in a high-cost coastal market and overstate it in a lower-cost region.
Compare homes that fit your actual commute and household needs, then check local property taxes, insurance availability and premiums, utility costs, association charges and the inventory of the housing type you would buy. The same salary can support very different payments when those variables change.
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How can I test whether a home is affordable for me?
Run the decision in this order so that a low advertised payment does not hide a cash or recurring-cost problem.
- Set a local price baseline. Compare the target home’s price with household income and with recent comparable sales in the same market, rather than relying on a national median.
- Run the rate sensitivity check. Price the loan at the actual quote and at a higher and lower rate so you can see how exposed the budget is to rate changes or refinancing assumptions.
- Count every dollar needed before moving in. Add the planned down payment, lender and other closing charges, a reserve for unexpected costs and the expenses of moving. Do not treat all available savings as spendable.
- Build the full monthly carrying cost. Add principal and interest to taxes, insurance, utilities, maintenance and any association fee. Verify insurance quotes rather than using a generic allowance.
- Compare the result with your own income volatility. A payment that works only in a best month is not robust affordability. Check how the budget behaves if overtime disappears, a rate is higher than expected or an insurance renewal increases.
Are people giving up on buying?
Many households still want to own, but fewer believe they can act soon. In the Federal Reserve Bank of New York’s 2026 survey, households expected home prices to rise 4.0% over the next year. The average probability of buying a home, conditional on moving within three years, was 52.9%, the lowest in that series since 2014.
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What should buyers conclude?
You are not necessarily doing something wrong if a good salary does not produce a comfortable home purchase. The sensible comparison is your local price-to-income ratio, rate exposure, cash required at closing and complete recurring-cost budget—not a parent’s old mortgage payment or a headline national median.
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Frequently Asked Questions
Why does my parent’s mortgage payment seem so low compared with today’s quotes?
The payment may reflect a loan originated years ago at a lower rate, a much smaller original balance after years of principal reduction, or a home that is now owned free and clear. Comparing that figure with a new loan mixes different purchase dates and debt balances.
Is waiting for mortgage rates to fall a guaranteed solution?
No. A lower rate would improve the financing side, but prices, insurance, taxes and available inventory could move at the same time. The New York Fed’s 2026 survey also shows households expected prices to rise, so waiting does not lock in a cheaper home.
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Why can two households with the same income receive very different affordability results?
Their outcomes can differ because they shop in different metros, need different housing types or face different taxes, insurance premiums, commute costs and association fees. Local supply conditions can change the price and choice available to each household.
What should I ask my parents before using their experience as a benchmark?
Ask when they bought, the purchase price, interest rate, down payment, household income at the time and whether the mortgage is still outstanding. Also ask which costs they paid separately, such as taxes, insurance, repairs and major improvements, because a remembered mortgage payment may omit them.
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