As mortgage rates have recently eased to a 10-month low, offering a glimmer of hope for would-be homebuyers, new research from InvestorsObserver reveals that the housing affordability crisis in America’s largest cities remains deeply entrenched.
Sam Bourgi, finance analyst and researcher at InvestorsObserver, notes, “Lower mortgage rates can help ease monthly costs, but the bigger story is the skyrocketing home prices and stagnant wage growth that have diminished purchasing power.”
According to findings, nearly half of the 50 largest U.S. metropolitan areas now have more than 80% of neighbourhoods unaffordable for median-income married couples in 2025 – a marker of how deeply the dream of homeownership has slipped out of reach despite lower borrowing costs.
Bourgi explains, “For many in cities like Providence and Riverside, a slightly lower borrowing rate simply isn’t enough to offset the unaffordable housing prices.”
The InvestorObserver analysis examined median married-couple incomes and neighbourhood home prices across more than 5,800 neighbourhoods within the largest metros. It revealed dramatic disparities, with cities like Los Angeles, Providence, and Riverside-San Bernardino topping the list of least affordable urban centres.
He adds, “The current market conditions show that the affordability crisis is structural, not cyclical.”
Los Angeles leads with 97.2% of neighbourhoods unaffordable to married-couple households, while Providence and Riverside-San Bernardino follow close behind with 89.8% and 89.2%, respectively. For nonfamily households, the affordability situation is far worse, with unaffordability rates exceeding 95% in the top 10 least affordable cities.
“Affordability isn’t just about mortgage rates. Wages, supply, and systemic housing market dynamics should be factored in as well,” Bourgi emphasizes. “Regions experiencing wage growth that outpaces home price increases are rare, and with interest rates only marginally improving, the American middle class faces a rapidly shrinking map of accessible housing markets.”
This affordability crunch persists even as Freddie Mac reported that the average rate on the benchmark 30-year fixed mortgage fell to 6.56% – a 10-month low – from 6.58% a week earlier, generating increased purchase demand amid modest economic growth.
However, the drop in rates from last year’s 6.35% average is insufficient to bridge the growing gap between incomes and home prices.
The quick widening of unaffordability is particularly sharp when comparing current metrics with pre-pandemic levels. Providence saw an astonishing spike, with unaffordable neighborhoods for married couples soaring from just 5.7% in 2019 to nearly 90% in 2025.
“For many families, especially in highly impacted metros, even modest borrowing rate improvements don’t address the deeper wage and price imbalance,” Bourgi states.
Dallas-Fort Worth and Las Vegas also reported sharp rises of 58.5 and 74.1 percentage points, respectively, demonstrating stark housing market volatility beyond traditional coastal hubs.
The data also shows persistent socioeconomic disparities in home access. Nonfamily and single-person households suffer the steepest affordability penalties due to lower median incomes compared to married couples.
Bourgi highlights, “Singles and nontraditional households face an even steeper affordability penalty in many metros, reinforcing widening inequality in housing access.”
In Los Angeles, while 97.2% of neighborhoods are out of reach for median-income families, an overwhelming 99.9% are unaffordable for nonfamily households, tightening the squeeze on singles and nontraditional households nationwide.
The shrinking pool of affordable metropolitan areas adds to the pressure. Only Louisville stands out in 2025 with an unaffordability rate under 10%, at 7.7% for married-couple households.
Bourgi concludes, “The American middle class is quickly losing accessible housing options, and this isn’t just about mortgage rates – it’s a structural crisis demanding multi-faceted solutions.”
Other cities traditionally known for affordability, such as Hartford, Memphis, and Cleveland, saw affordability erode significantly or were replaced by metro areas facing increasing challenges.
This evolving housing affordability condition carries heavy implications for American families, mobility, and economic equality. As the research highlights, the dream of owning a home – a cornerstone of economic security – has slipped further from reach in city after city, particularly for singles and middle-income earners.
The federal government has recognized the urgency, with Treasury’s housing strategist Douglas Bessent designating affordability reform “one of the big projects” for the coming fall.
Yet, as Boston’s unaffordability rate rose to nearly 73%, and New York City remains stuck above 88%, many metro areas still face daunting barriers.
With mortgage rates at a relative low but home prices at historic highs, the affordability crisis reflects a complex challenge that extends beyond monetary policy alone.
For families and singles, InvestorsObserver’s research paints a disheartening picture: the American dream of homeownership is increasingly at risk, with fewer neighborhoods accessible and more communities facing exclusion in 2025 and beyond.
