As the housing market faces continued challenges in 2025, the number of cost-burdened households is on the rise. Cost-burdened households are defined as those spending more than 30% of their income on housing—and with rising home prices, increasing mortgage rates, and escalating rents, more households are struggling to afford a place to live. This trend is not just affecting individuals—it’s shaping the real estate market as a whole. In this post, we’ll explore expert insights, actionable advice, and potential solutions for real estate professionals to navigate this complex market and better serve clients.
📊 The State of Housing in 2025: Key Stats to Know
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74.9% of U.S. households can’t afford the median-priced new home due to high home prices.
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51.8% of renters were cost-burdened in 2023—up from 48.4% in 2019.
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30% of middle-class homeowners are now spending over 30% of their income on housing costs, a significant rise from previous years.
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Over 20 million homeowners are cost-burdened, with 6 million spending more than 50% of their income on housing.
These statistics underscore the growing gap between household incomes and the cost of housing, making it clear that housing affordability will be a central issue in the real estate market for years to come.
💡 Expert Insights on Navigating the Cost-Burdened Housing Crisis
1. Sarah Thompson, Real Estate Analyst, National Association of Realtors (NAR)
"In a market like this, real estate professionals need to be proactive. Buyers should be aware of programs like adjustable-rate mortgages (ARMs) and local down payment assistance programs to help reduce upfront costs. These programs can offer much-needed relief as buyers face high mortgage rates."
Source: NAR
2. Brian Williams, Founder, Williams Property Group
"For sellers, it’s more important than ever to manage expectations and consider creative solutions. Offering closing cost assistance or home warranties can make your property stand out in a crowded market. If you can ease the financial burden for buyers, they’ll be more likely to make an offer."
Source: Williams Property Group
3. Emily Carter, Senior Investment Advisor, Carter Real Estate Advisors
"Real estate investors should shift their focus to multifamily properties in suburban areas. As more people opt to rent due to high home prices, these properties are expected to offer strong returns. It’s an opportunity to cater to the growing number of cost-burdened renters."
Source: Carter Real Estate Advisors
📖 A Relatable Story: How Strategic Advice Led to Homeownership
Meet Maria, a single mother from Texas, who dreamed of owning her own home but felt discouraged by the rising home prices and high mortgage rates. Maria worked hard, but the cost-burdened housing market made it seem impossible. However, she found a real estate agent who guided her through available options, such as down payment assistance and an FHA loan, which reduced the financial burden and made homeownership achievable.
Maria’s story highlights a crucial point: real estate professionals play a vital role in helping clients explore creative financing options. Adjustable-rate mortgages, government-backed loans, and local assistance programs can help reduce the financial barriers to homeownership.
❓ Frequently Asked Questions (FAQ) on Cost-Burdened Households
1. What is a "cost-burdened household"?
A cost-burdened household spends more than 30% of its income on housing. Those spending more than 50% of their income are considered severely cost-burdened.
2. How is the cost-burdened situation affecting the real estate market?
More households are unable to afford homeownership due to high home prices and mortgage rates. This leads to an increasing number of renters and challenges for sellers who must be creative to attract buyers in a competitive market.
3. How can real estate professionals help cost-burdened buyers?
Real estate professionals can guide buyers to affordable housing programs, down payment assistance, and FHA loans. Educating clients on these options can help them overcome financial hurdles and make homeownership a reality.
4. What are some solutions to the housing affordability crisis?
To address the housing affordability crisis, there is a need for expanded affordable housing programs, increased down payment assistance for first-time buyers, and more tax incentives for developers to build affordable homes.
5. How are rising home prices impacting homeownership rates?
Rising home prices have made it more difficult for many to afford homes, leading to a drop in homeownership rates. Many are opting to rent, which has fueled increased demand in the rental market.
6. Will the housing affordability crisis improve soon?
While down payment assistance programs and affordable housing initiatives are gaining traction, the housing affordability crisis will likely persist unless substantial policy changes are made at the federal and local levels.
📰 Recent News on Housing Affordability
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"Property Taxes and the Affordability Crisis in Chicago"
A report from the Cook County Treasurer reveals how a flawed property tax appeals system shifted nearly $2 billion in tax burden from businesses to low-income homeowners.
🔗 Read on Chicago Sun-Times -
"Housing Market in 2025: High Prices and High Rates"
J.P. Morgan’s 2025 outlook shows home prices are expected to rise modestly, but high mortgage rates and low demand continue to freeze the market.
🔗 Read on J.P. Morgan -
"U.S. Housing Market Faces Continued Uncertainty as Rates Stay High"
Mortgage demand continues to drop amid economic uncertainty, with buyers hesitant due to high rates.
🔗 Read on CNBC
📚 Further Reading
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Harvard Housing Study: Rising Cost-Burdened Households in the U.S.
Harvard’s Joint Center for Housing Studies reports record-high cost burdens among renters and homeowners, with affordability worsening across income levels.
🔗 Read the 2024 Report -
Affordability Crisis Deepens: Rising Rents in U.S. Cities
PBS explores why rents remain high post-pandemic and how low-income renters are disproportionately affected.
🔗 Read on PBS NewsHour -
Reducing Housing Burdens While Creating Long-Term Affordable Housing Solutions
A Center for American Progress report outlines strategies for sustainable affordable housing, including increased production and policy reform.
🔗 Read the Report
🏷️ Hashtags
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🚀 Get Involved: Take Action Today!
The cost-burdened housing crisis presents both a challenge and an opportunity. As a real estate professional, you have the power to make a significant impact by guiding clients through the complexities of the current market. By exploring creative solutions like down payment assistance, adjustable-rate mortgages, and FHA loans, you can help individuals and families realize their homeownership dreams.
Join the conversation, be part of the solution, and help shape the future of housing. Get involved now, contribute your ideas, and make a difference! Start here, fuel your growth, and take action today!
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