Prices Are Down, But Buying A Home Is Still Out of Reach
Yes, home prices are rising more slowly. No, that doesn't mean homes are any easier to afford.
According to the S&P CoreLogic Case-Shiller Index, U.S. home prices rose 2.3% year-over-year, down from April's 2.7% gain. Month-over-month, prices ticked up just 0.4% before seasonal adjustment.
But even with that 'cooling,' the National Association of Realtors (NAR) says the median existing-home price hit a record high of $435,300 in June. Existing home sales fell 2.7% month-over-month, despite a modest bump in inventory.
Experts say these challenges are likely to persist through the year . Still, those willing to be flexible on location may find more budget-friendly options, especially in areas where local conditions now carry more weight than national housing trends.
In other words: homes still cost more, buyers are fewer and the rising price slowdown isn't helping most Americans unless they're willing to relocate to more affordable areas.
Here's the hard math: In Florida, the median income for a single earner is $65,801, according to the U.S. Census Bureau. Following the commonly recommended rule of spending no more than three times your annual income on a home, that would suggest buying a home priced around $197,400.
But the actual median sales price for a single-family home in Florida was $412,000 in June, according to Florida Realtors—more than six times the median income. Even though that price is down 3.5% from a year earlier, it's still far above what many Floridians can afford without taking on significant debt.
In California, a one-earner household brings in about $76,190, which should put their target home price near $228,570. Yet California's actual statewide median price for existing single‑family homes stood at $899,560 in June, according to the California Association of Realtors. That's nearly 12 times the median income—an affordability gap that even seasoned financial advisers would call unsustainable.
Financial advisers may still recommend the three-times guideline, but for many Americans in 2025, the numbers no longer add up, even before accounting for interest, taxes and insurance.
New York once again led all Case-Shiller cities with a 7.4% year-over-year gain in May. Chicago followed with 6.1%, and Detroit came in at 4.9%. These increases continue the trend of stronger growth in the Midwest and Northeast metro areas.
On the other end of the spectrum, Tampa's home prices dropped by 2.4%—the seventh straight month of annual declines for the city. Several Western cities also showed signs of weakening; San Francisco prices slipped by 0.6%. Los Angeles increased just 1.1%, while San Diego and Phoenix posted minimal gains of 0.4% and 0.9%, respectively.
Nationally, prices rose 2.3% from a year ago. But nearly all of that growth happened in the last six months. Monthly trends suggest fatigue is setting in. After seasonal adjustment, prices declined 0.3% in May. That was the third month in a row of adjusted price drops.
Even in cooling markets, buyers are not seeing much relief. The problem is not just the sale price of a home. It is the mortgage rate, the cost of insurance, the property taxes and the growing gap between wages and what homes actually cost.
As of mid-July, the average 30-year fixed mortgage rate sits at 6.74%, according to Freddie Mac. That's only slightly lower than this time last year, but still high enough to choke affordability.
If rates were to fall to 6%, NAR's Lawrence Yun estimates 160,000 more renters could become homeowners. But until then, rising home prices and elevated borrowing costs are working in tandem to keep the market locked up.
A $400,000 home with a 30-year mortgage at a 7% rate with a 20% down payment equals a monthly mortgage payment of nearly $2,130, excluding taxes and insurance. That payment alone can eat up 40% or more of a median earner's take-home pay in states like Arizona, Nevada or North Carolina.
Borrowers who comparison shop often get better deals than those who don't.
Lenders reserve the best rates for those with a credit score above 740. According to Experian, those with a 780 or higher get the best rates. Even a 20-point bump can cut your payment significantly.
Sellers in slower markets may offer credits, rate buydowns or pay closing costs just to get deals done.
FHA, VA and local agencies (like CalHFA or MassHousing) offer lower down payments, better rates, down payment assistance programs and even grants for qualified buyers.
If you're open to relocating, aim for places where paychecks and home prices actually make sense.
Prices aren't crashing—but they're not accelerating, either. This is a market of sharp elbows and thin margins. Here's where preparation beats timing, and compromise is king.
If you're waiting for a big drop, you might miss your window. But if you're strategic about your budget, your lender, and your location, you can still get in the door. Just maybe not your dream door. Yet.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Yahoo
an hour ago
- Yahoo
Semtech, Teradyne, Western Digital, Allegro MicroSystems, and Intel Shares Are Falling, What You Need To Know
What Happened? A number of stocks fell in the morning session after the U.S. jobs report for July came in significantly weaker than expected while new widespread import tariffs were announced, sparking fears of a potential economic slowdown. The U.S. economy added only 73,000 jobs, far below estimates, and massive downward revisions to the prior two months painted a much weaker picture of the labor market. This has stoked recession fears, which would directly impact demand for chips used in countless products. Compounding these worries, the White House announced new tariffs, including a 20% levy on imports from Taiwan, a global hub for chip manufacturing. This dual shock of slowing domestic growth and renewed trade friction creates a challenging outlook for the highly cyclical and globally connected semiconductor industry, leading to a broad-based sell-off. The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks. Among others, the following stocks were impacted: Semiconductor Manufacturing company Semtech (NASDAQ:SMTC) fell 3.2%. Is now the time to buy Semtech? Access our full analysis report here, it's free. Semiconductor Manufacturing company Teradyne (NASDAQ:TER) fell 4%. Is now the time to buy Teradyne? Access our full analysis report here, it's free. Memory Semiconductors company Western Digital (NASDAQ:WDC) fell 3.4%. Is now the time to buy Western Digital? Access our full analysis report here, it's free. Processors and Graphics Chips company Allegro MicroSystems (NASDAQ:ALGM) fell 3.4%. Is now the time to buy Allegro MicroSystems? Access our full analysis report here, it's free. Processors and Graphics Chips company Intel (NASDAQ:INTC) fell 3.1%. Is now the time to buy Intel? Access our full analysis report here, it's free. Zooming In On Teradyne (TER) Teradyne's shares are very volatile and have had 23 moves greater than 5% over the last year. In that context, today's move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business. The previous big move we wrote about was 2 days ago when the stock gained 21.1% on the news that the company reported better-than-expected second-quarter financial results and provided a strong third-quarter forecast, driven by robust demand for its artificial intelligence (AI) chip testing equipment. The semiconductor test equipment manufacturer posted revenue of $651.8 million and adjusted earnings of 57 cents per share, both of which topped analyst expectations. Growth was primarily fueled by its core chip testing division, as demand for System-on-a-Chip (SoC) components for AI applications surged. This strength in AI was significant enough to offset weakness in the automotive and industrial sectors. Looking ahead, Teradyne's management provided an optimistic outlook, forecasting third-quarter revenue between $710 million and $770 million, which suggested continued momentum. Teradyne is down 18.6% since the beginning of the year, and at $103.06 per share, it is trading 26.4% below its 52-week high of $140 from January 2025. Investors who bought $1,000 worth of Teradyne's shares 5 years ago would now be looking at an investment worth $1,142. Today's young investors likely haven't read the timeless lessons in Gorilla Game: Picking Winners In High Technology because it was written more than 20 years ago when Microsoft and Apple were first establishing their supremacy. But if we apply the same principles, then enterprise software stocks leveraging their own generative AI capabilities may well be the Gorillas of the future. So, in that spirit, we are excited to present our Special Free Report on a profitable, fast-growing enterprise software stock that is already riding the automation wave and looking to catch the generative AI next. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
NBC News
an hour ago
- NBC News
More Americans seek Caribbean 'golden passports' amid political and economic uncertainty
A growing number of Americans are buying Caribbean 'golden passports,' which grant dual citizenship through investment programs starting at $100,000. Consultants say demand is being driven by anxiety over U.S. politics and global instability.
Vox
an hour ago
- Vox
How to start your own business in 2025, according to people who already did
Many workers, perhaps disillusioned by cubicle walls and fluorescent lighting, may have indulged in a fantasy at some point in their careers. They'd finally take that side gig and make it their sole source of income. They'd open that boutique in the empty storefront they pass every day. They'd turn that idea for an app into reality. The US is home to over 33 million small businesses — organizations with fewer than 500 employees — and businesses of this size account for nearly all of the country's employers. Nearly 46 percent of Americans are employed by a small business. Vox Culture Culture reflects society. Get our best explainers on everything from money to entertainment to what everyone is talking about online. Email (required) Sign Up By submitting your email, you agree to our Terms and Privacy Notice . This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply. But the path to getting these businesses off the ground — and ensuring they're sustainable — can be daunting. There's money to raise, leases to sign, staff to build, inventory to acquire. And in today's turbulent economy, with uncertainty around tariffs and predictions about a coming recession, these hurdles can seem insurmountable. But as these six entrepreneurs who all recently launched their businesses prove, there will never be the 'perfect' time to start your own company. From the bouncer who opened his own comic book shop to the new mom who launched a beauty brand, small business owners share what it took to get their ideas off the ground. Responses have been edited and condensed for clarity. Don't be afraid to change course From Joyce Medeiros, CEO and co-founder of Investrio, a bookkeeping and tax prep software for solopreneurs: I'd been in finance my whole career before building Investrio, and I saw a need for entrepreneurs to get their finances just right. My co-founder also came from finance. Initially, when we set out to build a tool, we were helping with credit card debt, and we didn't really understand who our ideal customer was. At the time, we were helping Latinos, we were helping minorities. Upon looking at the data holistically, after a couple of months, we realized our customer is a solopreneur, and it's not a credit card issue; it's an accounting problem. That led us to pivot the strategy, the marketing, the way that we approach the business and the product itself. 'I've made no money some months.' I was a financial coach before Investrio really took off. I've made no money some months. If you are ever curious about jumping ship, start working on some of those things that take time, like growing a social media audience, before you quit your job. I spent about a year building the social media presence, coaching on the side, and testing different products before I quit my full-time job. You might budget for three to six months until revenue comes, but it might take nine. You don't want to be left behind. You really want to plan ahead for the finances. Lean into your strengths — and outsource where you can From Grace Howland, founder of Évoquer, a direct-to-consumer fragrance brand: I was working in investment banking and private equity in industrials, and my favorite part of the job was speaking with the founders about their startup stories and how they built their businesses. Last year, my firm announced they were moving to New York and shutting down their LA office, and I quit the next day. I filed for an LLC about a month later. I lived and worked in Paris a few years ago, and I had this fragrance I wore every day while I was living there. Now, whenever I smell that, it brings me back to that time period of my life. I've always loved the idea behind scent memory. So my brand is really focused on scent memory and attaching different experiences to a scent and then always being able to come back to those periods in your life. I've hired someone to do product development, because I am not a perfumer. I hired a nose, which is basically a sommelier for fragrances, and she's been helping me mix. Every time she mixes a trial, she sends it to me, and then I send her notes. We're on trial number 106 and still going. We're going to launch in October, maybe November, and I just did not expect it to take that long, honestly. Consider your customer's price point From Maria Colalancia, owner of Aperitivo Society and Aperitivo the Shop, a business that hosts community dining experiences and a storefront selling home items in Boston, respectively: I moved up to Boston for a job and wanted to make this a place that I settled into and where I could try to build a community. I put out a TikTok and was like, 'Hey, I'm new-ish to Boston. I really like hosting dinner parties. Is anyone interested in a somewhat regular dinner party?' That TikTok went viral, and so I jumped into action. I made an Instagram and got a website, and we had 700 people sign up off of that one TikTok. We hosted the first dinner two weeks later in 2023. I continued that for over a year and a half while also working my full-time job. In March of 2024, I wanted to open a store, but I was not actively searching. I saw a space and signed the lease. That was over a year ago, and I've now quit my full-time job. 'The neighborhood has been really hungry for something like this for so long that we have a lot of really strong, loyal regulars already built in from day one.' I try to work with small businesses or local artists and smaller batch production. I might not directly see the impact of tariffs, but prices are definitely increasing, because they have to get their supplies from somewhere. People are very vocal about prices. It was shocking to me when someone would come in and be like, 'Oh my god, that is so expensive,' or not fully understanding all of the costs that go into that end price that the customer is seeing. The average consumer doesn't always understand, especially in a world with Amazon and Walmart where they're bypassing a lot of those middleman costs. It could get to a point where I can't source those products, and I have to pivot to other products, or the prices just get too high to where people no longer want to buy them. Listen to the needs of the community From Zach George, owner of East Atlanta Comics, a comic shop in Atlanta: I have worked at a bar down the street for 11 years in November. I've been a bouncer there. I love the neighborhood. A friend of mine who's a bartender opened a record shop two years ago, Black Habit Records. It gave me inspiration to see if it was possible to do a comic shop. I've always loved comic shops and nerd stuff. I sold an empty piece of property that I had an investment in and used that money to finance the store. I did all this on 60 grand. I live pretty modestly. It wasn't an easy thing to get together, but when I saw the store, I was like, 'It's worth trying.' The neighborhood has been really hungry for something like this for so long that we have a lot of really strong, loyal regulars already built in from day one. There's no Toys R Us anymore. There's no KB Toys. Kids don't have a spot where they go to pick out something cool. That's been really cool to see: all the neighborhood families that come in here on a regular basis. And then, also, the homies that I've grown up coming here and getting hyped on Batman is pretty cool. Embrace the power of negotiation From Irene Ham, founder of Poom Cosmetics, a direct-to-consumer skin care company: I started my brand four months after I gave birth, so I was deep into postpartum, taking care of a newborn. I'm Korean and use a lot of Korean skincare and cosmetic products, so I wanted all of my products to be manufactured from Korea. I really love their focus on skin health. I was researching manufacturers overseas while my baby was 4 to 6 months old, and then I finalized a manufacturer who was able to lower the minimum order quantities. It took two years to formulate my foundation. 'If I had my inventory ship after the tariffs hit, I would have had to pay around 26 grand for tariffs.' When the tariffs were announced, my inventory was shipping. Luckily, I was able to avoid the tariffs this time around. If I had my inventory ship after the tariffs hit, I would have had to pay around 26 grand for tariffs. I did not have that money. But now that I've launched, I am in a place where I can account for the tariffs. It's giving me a lot more negotiating power with my manufacturers. Can you lower the minimum order quantity? That's the biggest obstacle in a product-based business, that minimum order quantity, where they require you to reserve so much inventory up front, and it's very expensive. I understand that there's a chance that when I get my inventory, it's going to cost maybe 30 percent higher. Level up when you can From Christy Lee, owner of Seventh House Marketing, a creative marketing agency: I was in-house for a jewelry brand for three and a half years, and I was the chief marketing officer. I have always been sure that an agency is what I wanted to do, but I didn't know exactly what it would look like. I didn't start any work, front-end or behind-the-scenes, for Seventh House until I quit. I took a month and a half, 24/7, where I was working hard to get everything prepared for the marketing, the branding. I developed the website by myself. It was very scrappy, because I was just me starting out as a team of one. Then, I was able to launch in February 2024.
