A dramatic surge in US property values is creating a nation of ‘have’s and have-not’s,’ with millions of Americans feeling financially poorer despite a booming housing market, a major new analysis has found.
The staggering rise in home values, which skyrocketed by a staggering $2.6 trillion over the past year, has created a stark divide. Existing homeowners are sitting on significant paper wealth, while a generation of aspiring first-time buyers is being priced out entirely.
The Affordability Crisis in Focus
According to the latest report from property giant Zillow, the US housing market is now less affordable than at any time in recent history. The typical American household would need to spend over 40% of its income to comfortably afford mortgage payments on an average-priced home—far exceeding the 30% threshold considered manageable.
This crisis is being fuelled by a perfect storm of high mortgage rates and record-high property prices. The average monthly mortgage payment has nearly doubled since before the pandemic, creating an insurmountable barrier for many.
A Tale of Two Americas
The data reveals a deeply uneven financial landscape. For the roughly two-thirds of Americans who own their homes, the inflation has been a windfall, significantly boosting their net worth. However, for the remaining third who rent or are trying to buy their first home, the dream of ownership is slipping further away.
“You have this split in society between those who are in and those who are out,” the report suggests, highlighting the growing wealth gap cemented by property ownership.
The Road Ahead
Experts suggest that a meaningful correction in affordability is unlikely without a substantial increase in housing supply—a solution that will take years to materialise. For now, the US housing market remains a formidable challenge for newcomers, cementing a new era of property-based inequality.
