According to Harvard University's Joint Center for Housing Studies, the average 30-year mortgage interest rate sits at 6.2%, which puts it more than a half percentage point below the 6.8% rate averaged in the second quarter of 2025. Nonetheless, homebuying levels remain at 30-year lows, highlighting that it’s not simply interest rates but high home prices that are the major barriers to housing affordability today.
Costs for homebuyers are still historically high. Mortgage payments on the median-priced home in the US are more than double what they were in 2020. For the typical first-time homebuyer loan with a 3.5% downpayment, mortgage costs soared 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
