{"id":82044,"date":"2025-09-02T05:00:06","date_gmt":"2025-09-02T12:00:06","guid":{"rendered":"https:\/\/www.redfin.com\/news\/?p=82044"},"modified":"2025-08-29T14:34:52","modified_gmt":"2025-08-29T21:34:52","slug":"return-to-normal-housing-2025","status":"publish","type":"post","link":"https:\/\/www.redfin.com\/news\/return-to-normal-housing-2025\/","title":{"rendered":"U.S. Housing Costs to Return to \u2018Normal\u2019 by 2030 With Stable Price Growth and Moderately Lower Rates"},"content":{"rendered":"

This year, the U.S. housing market has been described as \u201c<\/span>a nightmare<\/span><\/a>,\u201d \u201c<\/span>very unusual<\/span><\/a>\u201d and \u201c<\/span>alarming<\/span><\/a>,\u201d along with expletives we can\u2019t write here. And with good reason: home prices are near record <\/span>highs<\/span><\/a>, mortgage rates remain <\/span>elevated<\/span><\/a>, and not enough homes are being <\/span>built<\/span><\/a> to meet demand in many areas of the country.\u00a0<\/span><\/p>\n

But recent weeks have brought some signs that the housing market is trending in a positive direction: home-price growth is <\/span>slowing<\/span><\/a> and mortgage rates are starting to <\/span>fall<\/span><\/a>.\u00a0<\/span><\/p>\n

Here’s a glimmer of the light at the end of the tunnel: housing costs could return to \u201cnormal\u201d by 2030 if home-price growth stabilizes and mortgage rates fall to 5.5%.\u00a0<\/span><\/p>\n

Today\u2019s report explores hypothetical scenarios for U.S. home price growth, mortgage rates and income levels in which housing costs\u2014measured using the mortgage payment-to-income ratio\u2014would return to \u201cnormal.\u201d\u00a0<\/span><\/p>\n

Redfin Senior Economist <\/span>Asad Khan<\/span><\/a> said while the scenarios in the report are hypothetical and should not be read as predictions, they point to a time in the not-too-distant future where housing costs could return to a level of relative affordability.<\/span><\/p>\n

\u201cThe path back to normal housing costs doesn\u2019t require a crash in home prices\u2014stability may be enough,\u201d Khan said. \u201cBuyers shouldn\u2019t expect affordability to snap back overnight, but the trend lines point to real progress within this decade. If mortgage rates decline modestly, and price and income growth hold steady, the market for homebuyers could feel much different by the late 2020s. We are cautiously optimistic normalcy may not be as far off as many might fear.\u201d\u00a0<\/span><\/p>\n

What do you mean by \u201cnormal\u201d?<\/b><\/h3>\n

It\u2019s impossible to identify a single moment in the housing market that everyone can agree was \u201cnormal\u201d\u2014trust us, we tried. For the purpose of this exploration, we chose July 2018 as our baseline.\u00a0<\/span><\/p>\n

In July 2018, mortgage rates were in the mid-4% range, and home prices were rising but still relatively manageable. The number of <\/span>buyers and sellers was relatively balanced<\/span><\/a>. The national median monthly mortgage payment-to-income ratio had just reached 30%\u2014meaning the typical U.S. household purchasing a home would need to spend 30% of their income on their mortgage each month. This 30% threshold is a widely recognized <\/span>benchmark<\/span><\/a> for housing affordability.\u00a0<\/span><\/p>\n