Harvard University’s Joint Center for Housing Studies reported that home prices nationwide increased 54% between 2020 and 2025. In 2025, the median existing single-family home sold for almost five times the median household income.
The average 30-year fixed mortgage rate reached 7.03% on Sept. 24, according to Freddie Mac, up from 6.95% the previous week and 6.30% a year earlier. It was the first time the average rate had peaked at 7% since January 2025.
Higher interest rates affect how much a buyer can afford to borrow. Freddie Mac estimates that the principal and interest payment on a $300,000, 30-year mortgage is about $1,996 at 7%, compared with $1,896 at 6.5%. That number is before property taxes, homeowners insurance, mortgage insurance, maintenance and other costs.
And $300,000 is on the low end of homes for sale in Colorado. Realtor.com data showed that August median listing prices ranged from about $323,500 in Southeast Colorado Springs to more than $750,000 in some northern ZIP codes.
For El Paso County, the median listing price for a home was $485,000 in August, according to Realtor.com data. That was down from $495,000 in June and May.
Redfin estimated in August that a household needed an annual income of about $109,796 to afford the typical U.S. home. According to Redfin, the average American household earns about $22,000 less than $109,796. Redfin also found that only 34% of homes listed for sale were affordable for the typical U.S. household.
El Paso County’s median household income was $91,009, according to the 2024 American Community Survey. Census data also put the median value of owner-occupied homes at $461,000 and the median monthly cost for homeowners with a mortgage at $2,145.
Who can afford to buy?
The market is especially challenging for first-time buyers, who generally do not have equity from a previous home to use toward a down payment.
The National Association of Realtors reported in April that first-time buyers accounted for just 21% of home purchases in its latest survey period — the lowest percentage since the organization began collecting the data in 1981. Baby Boomers accounted for 42% of buyers; millennials represented 26%, Gen X 25% and Gen Z 4%.
Higher-income households, dual-income families, buyers with substantial savings and current homeowners who have accumulated equity are in a better position to purchase homes. And smaller homes, assistance programs or mortgages requiring smaller down payments are an option for some. If it’s possible, potential buyers can look at other states and cities. Housing costs, wages, property taxes and insurance vary by market.
It’s more like who can’t afford to buy a home
There is also a growing trend in this country: Young adults are living with their parents. An acquaintance of mine has two kids — both in their 30s. They have jobs that pay about $50,000 to $60,000 each. They both have one child each. They share custody with their former partners. It’s not even affordable to rent so they ended up with their parents.
A record 25.2 million adults under age 35 (about 1 in 3) live in their parents’ homes, according to Realtor.com
And then there are the worker bees on the lower end of the pay scale — the people who work hard and get paid less. They are the nurses, teachers, administrative workers, nurses aids, laborers, retail employees, restaurant employees, and on and on. They make the least amount of money and work hard.
In this day and age, unless you have been conscientious about saving money, come from a wealthy family or have a partner, that American dream of owning a house is a fallacy!
October is Breast Cancer Awareness Month, a time to raise awareness about breast cancer, encourage regular screenings and promote early detection.
Happy Halloween, be safe and see you in November!
Michelle
