U.S. Housing Now the Most Unaffordable in History? 7 Data Points You Won’t See in Doomer Tweets
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We live in a screenshot economy.
A chart (or headline) pops up on your feed, racks up thousands of likes and shares, and in the eyes of consumers, it turns into proof. Proof that housing is doomed. Proof that affordability has never been worse. Proof that the next bubble is already here.
No one loves a moment like this more than housing doomers. They’ve been calling for the next crash for years, and posts like the one below—currently making the rounds on X—fit into that narrative.
Charts travel fast. Context doesn’t.
Real estate professionals know that affordability encompasses numerous factors, including home prices, mortgage rates, wages, inventory, and more.
If the chart above were the whole story, the outlook would be bleak. And yes, affordability issues are a hurdle right now. But several data points are showing gradual improvement in the housing market. It’s the kind you won’t see in doomer posts.
Let’s walk through them.
#1: January Delivered the Biggest Housing Affordability Relief Since 2022
According to the latest Mortgage Monitor Report, “early January declines in mortgage rates unlocked refinance opportunities for nearly five million borrowers and helped push affordability to a four-year high.”
Those refi opportunities alone mean nearly five million U.S. borrowers were able to lock down lower monthly housing payments on their current mortgages.
Lower payments for some could mean narrowly avoiding foreclosure. For others, it could go even further to increase monthly savings and improve financial well-being.
As of February 17, 2026, rates are down to 6.04%, just a few ticks away from a five-handle. And while home prices are still ticking up (because that’s generally what they do), those lower rates could bring more buyers into the market that are fed up with waiting for 5.99% or lower.
At the very least, it could bring more month-to-month relief to homeowners via the refi route.
During his Hot Sheet review of the report, Byron Lazine added this about affordability:
“Let’s be real, here, it’s still stretched, relative to where people want to be on affordability. But as I’ve said for many weeks now, affordability is improving…. You’ve gotta recognize what’s happening on a month-to-month basis.
“Slowly but surely, the market is working its way through. And January marks the highest in four years for affordability.”
#2: The Buy vs Rent Gap Is the Smallest in 3 Years
Earlier this month, Redfin highlighted the shrinking gap between the income required to buy a typical home versus rent the typical apartment. With buyers needing $111,000 annually and renters needing $76,000, that gap has shrunk to its smallest in three years ($35,000).
Redfin economist Grishma Bhattarai explained it this way:
“Many Americans have been hesitant to jump from renting to buying due to high homeownership costs, but the recent drop in mortgage rates and rise in homebuyer negotiating power may help some take the leap.
“We expect homebuying affordability to gradually improve in the coming year as mortgage rates stay closer to 6% than 7%, home-price growth loses steam, and wages rise faster than housing costs.”
#3: Homebuyer Affordability Improved 7.5% in 2025
According to the Mortgage Bankers Association’s December 2025 Purchase Application Payment Index (PAPI), housing affordability improved 7.5% in 2025 as the national median mortgage payment fell to $2,025, down $102 year over year.
The main reason for that decline is lower mortgage rates. And with incomes also rising, that payment is taking up a smaller share of household income.
The result is that homeownership was more affordable at the end of 2025 compared to its beginning.
And with rates continuing to decline since then, that monthly payment is expected to follow suit.
Here’s more from Edward Sellier, MBA’s Associate Vice President of Housing Economics and Executive Director of the Research Institute for Housing America:
“Housing affordability conditions improved for the seventh consecutive month to close out 2025 because of lower mortgage rates and steady household earnings growth.
“MBA expects that moderating home-price appreciation, combined with even lower mortgage rates, will continue to gradually ease affordability constraints and support increased housing market activity.”
#4: Renter Affordability Is Improving, Too
It’s not just buyers seeing incremental relief. Renters are starting to feel it as well.
According to Zillow, renter affordability has reached a four-year high. The typical household is now spending 26.4% of income on rent, the lowest share since August 2021, as rent growth slows and incomes continue to rise. The typical asking rent in January was $1,895, essentially flat month over month and up just 2% year over year, marking the slowest annual rent growth since 2020.
More supply and higher vacancy rates are giving renters more leverage. Nearly 40% of listings include concessions like free months of rent or reduced deposits, and Zillow expects multifamily rents to remain mostly flat in 2026 (-0.2%) while single-family rents rise just 1.1%.
As Zillow senior economist Orphe Divounguy explained:
“Renters are operating in a very different environment than they were just a few years ago. When supply expands and vacancies rise, property managers have to adjust on both price and terms. Concessions are near record highs, keeping rent growth modest and creating meaningful opportunities for renters.”
Renting still isn’t cheap. But for those not ready to buy yet, the pressure is easing, showing another piece of the affordability story that rarely shows up in viral doomer charts.
#5: Nearly 1 in 5 New Homes Had Price Cuts in Q4 2025
Home builders are cutting prices more than sellers, with 19.3% of new homes seeing price drops in the final quarter of 2025, according to Realtor.com’s latest New Construction Insights report, compared to just 18.3% of existing homes.
As their report also makes clear, these price cuts are “generally concentrated in the South and West.”
Realtor.com Chief Economist Danielle Hale explained:
“New construction has been one of the steadiest parts of the housing market over the past few years, but builders are clearly responding to today’s affordability pressures and higher-levels of existing-home inventory. Nearly one in five new homes cut prices, more than in the resale market for the first time in recent history.
“This is not just a reflection of regional divergence and where new homes are built; we are seeing builders compete more directly on price to keep sales moving, even as overall new-home prices remain relatively stable.”
#6: Sellers Outnumber Buyers by 37%
Earlier this year, Redfin reported that the U.S. housing market has 37% more sellers than buyers, giving the latter more negotiating power in many markets.
Granted, this isn’t the case in every market, and knowing your local market conditions and being able to explain it to consumers in a way that empowers them is how you become the guide they need as conditions both local and national evolve in the coming months.
Byron Lazine had this to say about the data in his Hot Sheet breakdown:
“This is more than double last year’s gap… And if you’re in one of those markets like the Gulf Coast in Florida, it’s going to feel bigger.”
Of the 10 major metros with the biggest gaps, Austin leads with 114.3% more sellers than buyers. Charlotte is at number 10 with its 78.1% gap still more than twice the national average.
Meanwhile, a smaller group of markets still favor sellers, with Nassau County, NY, at number one, with 39.1% fewer sellers than buyers.
As Byron added:
“We have a bifurcation still going on in this country… But sellers need to be prepared for a longer timeline. I think that’s the biggest change, that’s the biggest condition that sellers weren’t prepared for in ‘25.”
Translated for buyers, that means more time to consider their options rather than rushing into an offer on a home they later find they cannot afford.
#7: Industry Forecasts Point to Steady Improvement
Our latest housing forecast roundup had a mix of more-or-less cautiously optimistic predictions on home sales, home price growth, inventory growth, and mortgage rates.
Not a single forecaster so much as hinted at a housing “bubble,” which would require more inventory (or a greater imbalance of inventory vs demand) than we currently have.
Do any expect a dramatic increase in affordability over the next 12 or 24 months? No. But for the most part, housing economists expect incremental moves in a better direction.
Home price forecasts showed the widest spread, with growth predictions ranging from -0.3% to +4.3%. The Mortgage Bankers Association (MBA) was the only one in the round-up to predict a decline.
In other words: no one expects a crash.
As for home sales, every single forecaster in the roundup predicted an increase for 2026, up from the 2025 total of 4.06 million, with predicted increases ranging from 1.7% to 14%.
Mortgage rate predictions were modest, ranging from 6.0% to 6.5% for this year’s average, down from the 2025 average of 6.66%.
January 2026 wrapped with an average 30-year fixed rate of 6.16%, down year over year from 6.85%.
Bonus Fact: Bipartisan Housing Bill Passes the House
While it’s still too soon to tell whether the Housing in the 21st Century Act will make it to President Trump’s desk, it means something that the bill passed the House with near-unanimous bipartisan support.
Here are a few changes in the bill that could improve affordability:
Addressing the bottlenecks that slow housing production, from local zoning restrictions to federal reviews (i.e., red tape)
Restore HUD authority over energy standards for new home construction, potentially lowering by $10,000 per unit.
Make it easier to charter new banks, so institutions can (hopefully) better serve smaller or underserved communities
Update federal definitions for manufactured and modular housing to reflect modern building methods and repeal the permanent chassis requirement for manufactured homes
Even if the bill doesn’t become law, the trends revealed in the latest housing reports and forecasts point to slow but steady improvement in housing affordability.
The better you can explain what’s going on and spot the opportunities for your buyers and homeowners as market conditions evolve, the more people will see the fuller picture they’re not getting from doomer posts and alarmist headlines.
Housing Market | February 18, 2026 | Sarah Lentz
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