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Housing Costs Have Outpaced Income Gains

Younger adults are increasingly renting as the national homeownership rate for those under 35 falls to 35 percent.

Updated on Oct. 10, 2026 in Residential

Gouache-painted editorial illustration of a solitary brass key on a wooden threshold, evoking the challenge of modern home affordability.
Homeownership rates for adults under 35 have dropped to 35 percent as housing costs continue to outpace wage growth across the United States. AI Illustration. Upload story photo >

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Recent data from J.P. Morgan shows that housing costs have continued to outpace income gains across the United States. This shift has contributed to a decline in homeownership among adults under 35, which has dropped to 35 percent from 39 percent in early 2022.

Why it matters

Rising property taxes, insurance costs, and elevated mortgage rates have made buying a home significantly more burdensome for families. These factors, paired with 25 years of wage growth trailing housing costs, have made renting the more affordable option in most large U.S. metros.

The average 30-year fixed mortgage rate currently sits at 7.4% as the 10-year Treasury yield reached 5.32%. Meanwhile, the PCE price index rose 3.4% year over year as of August 2026.

The players

J.P. Morgan

A global financial services firm that tracks and reports on economic trends, including national housing affordability.

Federal Reserve

The central banking system of the United States responsible for setting monetary policy and influencing interest rates.

Peter Schiff

An investment analyst and commentator who tracks Treasury yields and economic market projections.

The details

The current market environment is driven by a combination of high interest rates, recently increased by 25 basis points in September 2026, and broad inflationary pressures. While the multifamily sector continues to manage an oversupply caused by a recent construction wave in the Sunbelt, national ownership barriers remain high. Policymakers at the Federal Reserve have also signaled that further rate hikes could occur before the end of the year, potentially sustaining these elevated costs for prospective buyers.

Timeline

  1. Early 2022: Homeownership for those under 35 was 39%.

  2. August 2026: The PCE price index rose 3.4% year over year.

  3. September 2026: The Federal Reserve raised interest rates by 25 basis points.

  4. October 2026: The 10-year Treasury yield reached 5.32%.

  5. 2027: Mortgage rates are expected to reach the 6% range.

The Home Front

This development follows a documented 25-year trend where residential costs have consistently outpaced income growth. Current market conditions represent a continuation of this cycle, intensified by recent interest rate adjustments.

Evaluate your long-term housing budget by comparing local rental rates against the total cost of ownership including taxes and insurance. Prospective buyers should consult a local lender to understand how current mortgage rates and potential 2027 shifts impact their monthly mortgage affordability.

The takeaway

While housing costs remain elevated, experts suggest potential relief for mortgage rates could arrive in 2027. Households should focus on tracking their regional market conditions and debt-to-income ratios when planning for future property purchases.

Further reading

For more on the current housing climate, explore the Residential section.

Source note: This article includes information reported by Benzinga.

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Do you feel that homeownership is becoming more attainable for people in your area?