Manya Rathore
Research expert covering India
U.S. affordable housing - statistics & facts
While the American Dream was built on the promise of a home, it is increasingly out of reach for many households as affordability declines and housing costs outpace income growth. In 2025, over 10 million American households were severely burdened by the cost of housing. A survey found that more than a third of those renting did not own a home because of the high cost of living.
Low-income and minority households falling short of rents
Many of the most common occupations in the U.S. pay wages that are less than the housing wage of one-bedroom home. Additionally, a substantial disparity in affordability could be seen among different races: Black and Latino renters earn lower wages on average, meaning that鈥痑 lower percentage of people within these groups had sufficient income for a two-bedroom apartment.
The lowest income-renters face a shortage of over seven million affordable and rental homes with an average of only 35 affordable and available homes for every 100 extremely low-income renter households. Consequently, three-quarters of renters with extremely low income are severely cost-burdened, spending more than 50 percent of their income on rent. This raises the question: What are the hurdles in the way of constructing affordable housing?聽
Building affordable housing comes at a cost. Access to developable land at the right price, a persistent labor shortage and effects of tariffs and inflation on building material prices, among other factors, challenge the financial feasibility of many new construction projects.
Is homeownership more affordable than renting?
House prices have usually risen faster than rents, making homeownership unaffordable for the average American. After more than a decade of historically low interest rates, mortgage rates jumped sharply over the last few years. On average, renting a home was cheaper than paying a mortgage in all 50 of the largest U.S. metropolitan areas in 2025. The biggest cost gaps existed in the tech hubs of San Francisco, San Jose and Seattle.
However, the affordability gap between renting and owning a home might be closing, as home prices begin to ease while rents continue to climb. By the end of 2025, there was an estimated聽47 percent more home sellers than buyers in the U.S. housing market reflecting a shift towards a 鈥渂uyers鈥 market鈥 . But availability does not translate to affordability. Property taxes, homeowners鈥 insurance and maintenance costs elevate housing costs, especially when mortgage rates are high and prices haven鈥檛 fallen enough to offset that. And while the gap is narrowing, homeownership remains out of reach for many Americans.聽
