Scriptural Framework:
'Do not rob the poor because he is poor, Nor oppress the afflicted at the gate;' - Proverbs 22:22
'And they covet fields and then tear them away, and houses, and take them away. And they oppress a man and his house, A man and his inheritance. ' - Micah 2:2
'Therefore, because you impose heavy rent on the poor and take a tribute of grain from them, though you have built houses of cut stone, yet you will not live in them; You have planted desirable vineyards, yet you will not drink their wine. For I know your transgressions are many and your sins are mighty, you who distress the righteous and take bribes, and turn aside the needy in the gate. Therefore at such a time the one with insight keeps silent, for it is an evil time. ' - Amos 5:11-13
I learned about how to calculate mortgage prices yesterday in my class. Then I had a thought about the price change in home prices since the 1960s.
So I went on FRED and looked at this image here.
What you’re seeing: Blue line (left scale): Mortgage interest rates from 1965-2025
Teal/green line (right scale): Average home prices from 1965-2025
The simple story: Mortgage rates went WAY up in the 1980s (hit nearly 18%!), then came back down. But look at home prices, they just kept climbing and climbing, especially after 2020.
Bottom line: Even though it’s “cheaper” to borrow money today than in the 1980s, homes cost SO MUCH MORE that monthly payments are still crushing people.
Interest rates have definitely fallen since they started tracking them in ~1971. But home prices have risen dramatically. Assuming a 20% down payment.
1971: $140/month
- Home price: $25,000 | Rate: 7.5%
1980: $555/month
- Home price: $65,000 | Rate: 12.5%
1990: $878/month
- Home price: $125,000 | Rate: 10%
2000: $998/month
- Home price: $170,000 | Rate: 8%
2010: $945/month
- Home price: $220,000 | Rate: 5%
2020: $1,113/month
- Home price: $330,000 | Rate: 3%
2025: $2,034/month
- Home price: $412,000 | Rate: 6.27%
But has income followed that? I want to look at the average income in the bottom 60% of America. Removing the top 40% will remove outliers like millionaires and billionaires, as the average monthly income overall in 2025 is around ~$6,900. I don’t know about you, but I don’t know who is making $6,900 a month…
So let’s take a look at the affordability of the bottom 60% of Americans in 2025.
Note: This uses P&I (principal and interest) only. Add property taxes ($412/month) and insurance ($172/month), and the burden increases by another 7-9 percentage points for each income group. With a full PITI of $2,618/month, you’d need about $112,200/year to afford it comfortably – pushing the threshold even higher to around the 63rd percentile. That means only the top 37% could afford it, not the top 45%. For consistency, all historical calculations (1971-2020) also use P&I only.
What you’re seeing:
Blue line (left scale): Mortgage interest rates from 1955 to 2025
Teal/green line (right scale): Average home prices from 1955-2025
Purple line (right scale): Real mean family income (adjusted for inflation) from 1955 to 2025
The simple story: The purple line shows what families actually earn. Notice how it stayed pretty flat while home prices (teal line) shot up like a rocket? That’s the crisis.
Bottom line: Incomes stayed mostly flat for 50+ years while home prices increased 20X. This is why your parents could buy a house on one salary, but you can’t afford one even with two incomes.
Translation: It’s not that young people are bad with money – the math literally doesn’t work anymore.
THE BRUTAL TRUTH:
Who Can Actually Afford the Median Home?
- Bottom 55% (74 MILLION households): NO
- You need $87,171/year to afford it comfortably (28% rule)
- That’s the 55th percentile – only the top 45% of earners
NUMBER OF AMERICANS IN EACH INCOME BRACKET
BELOW 25th PERCENTILE (Under $41,401/year)
- 33.7 million households
- 84.4 million Americans
- Mortgage Payment: 59%+ of income
- Verdict: SEVERELY BURDENED – Essentially priced out
25th-40th PERCENTILE ($41,401 – $66,716/year)
- 20.2 million households
- 50.6 million Americans
- Mortgage Payment: 36.6-59% of income
- Verdict: SEVERELY to COST BURDENED – Would be “house poor”
40th-50th PERCENTILE ($66,716 – $83,592/year)
- 13.5 million households
- 33.7 million Americans
- Mortgage Payment: 29.2-36.6% of income
- Verdict: COST BURDENED – Stretching too thin
50th-60th PERCENTILE ($83,592 – $105,411/year)
- 13.5 million households
- 33.7 million Americans
- Mortgage Payment: 23.2-29.2% of income
- Verdict: BARELY AFFORDABLE to COMFORTABLE – On the edge
ABOVE 60th PERCENTILE (Over $105,411/year)
- 54.0 million households
- 135.0 million Americans
- Mortgage Payment: Under 23.2% of income
- Verdict: COMFORTABLE – Can truly afford it
Historical Comparison (25th Percentile Households):
- 1971: 22.4% of income – Challenging but doable
- 2020: 36.1% of income – Stretched but manageable
- 2025: 59% of income – HEAVILY BURDENED
For the Bottom 25% ($41,401/year):
- Can afford: ~$190,000 home
- Median home price: $412,000
- The median home is 2.16X too expensive
Over the last 5 years, housing affordability has been in a complete breakdown for working-class Americans. So when we look at the world today and the younger generation, remember that it is not the world of the pre-2000s. It is a vastly more expensive world. Be kind to those who have the same opportunity as you did, but not the same cost.
'The righteous knows the cause of the poor, the wicked does not understand that knowledge. ' - Proverbs 29:7
'“You shall not oppress a hired person who is afflicted and needy, whether he is one of your brothers or one of your sojourners who is in your land within your gates. You shall give him his wages on his day before the sun goes down, for he is afflicted and sets his soul on it, so that he will not cry against you to Yahweh and it become sin in you. ' - Deuteronomy 24:14-15
Data Sources for Housing Affordability Analysis:
Home Prices:
- FRED – Average Sales Price of Houses Sold for the United States
- https://fred.stlouisfed.org (view chart in image provided)
Mortgage Rates:
- FRED – 30-Year Fixed Rate Mortgage Average in the United States
- https://www.freddiemac.com/pmms (Freddie Mac Primary Mortgage Market Survey)
2025 Income Percentiles:
- DQYDJ Household Income Percentile Calculator using IPUMS CPS Version 13.0 data
- https://dqydj.com/household-income-percentile-calculator/
- 25th percentile: $41,401
- 50th percentile (median): $83,592
- 60th percentile: $105,411
Historical Income Data:
- DQYDJ Household Income by Year (1968-2024) using IPUMS CPS data
- https://dqydj.com/household-income-by-year/
- 1971 median household income: $8,700
- 2020 median household income: $68,400
Historical Home Affordability Tool:
- DQYDJ Historical Home Affordability in the United States
- https://dqydj.com/historical-home-affordability/
Original Data Source:
- Sarah Flood, Miriam King, Renae Rodgers, Steven Ruggles, J. Robert Warren, et al. IPUMS CPS: Version 13.0 [dataset]. Minneapolis, MN: IPUMS, 2025.
- https://doi.org/10.18128/D030.V13.0
- https://cps.ipums.org/cps/
Census Bureau Sources:
- U.S. Census Bureau – Income and Poverty in the United States: 2020
- https://www.census.gov/library/publications/2021/demo/p60-273.html
- Current Population Survey Annual Social and Economic Supplement (CPS ASEC)
- https://www.census.gov/data/tables/time-series/demo/income-poverty/cps-hinc.html
Real Mean Family Income:
- FRED – Real Mean Family Income in the United States
- https://fred.stlouisfed.org/series/MAFAINUSA672N
- U.S. Census Bureau data via FRED
All calculations (mortgage payments, percentages, affordability limits) are derived from these primary data sources using standard mortgage formulas and the 28% front-end debt-to-income ratio guideline.
