In 2026, affordable housing is an issue that everyone has an opinion on, but no one really seems to know a quick, long-term solution. Real estate agents must wonder if the fate of affordable housing is similar to that of the Dodo. Will we just keep falling off a cliff until affordable housing options become extinct?
The last time housing was considered “affordable” for many Americans was from 2010 to 2012, during the painful adjustment period following the 2008 financial crisis. Since then, home values have steadily increased along with inflation and the overall cost of living.
What hasn’t caught up? Average American salary. As a result, the gap between housing costs and what working families can realistically afford is widening.
Real estate agents are seeing the effects up close, and for those who specialize in traditional residential real estate, the affordable housing crisis is more than just personal. Young, enterprising buyers are increasingly sidelined, not because they’re unmotivated or buy too much avocado toast, but because the math of what it takes to qualify for a mortgage no longer works.
Even with interest rates easing, many first-time buyers remain excluded from homeownership in the areas where they live and work.
The Trump administration’s current arguments regarding affordable housing are the exact opposite of what buyers are looking for. “I want to raise the price for my homeownership” offers little reassurance to renters (the median age of first-time homebuyers is now 40) who are seeing rents rise, savings dwindle, and purchasing power eroded faster than their hairline (the median age of first-time homebuyers is now 40) and leaves a bad taste in everyone’s mouth.
Political parties on both sides of the aisle are frustrated and committed to reform, but without a basic understanding of what most Americans need, without a willingness on everyone’s part to address the problems that are causing the problems in the first place, even this hopeful new bill is likely to be dysfunctional on arrival.
apollo
Affordable housing is currently in what economists describe as a “polycrisis.” Multiple, interrelated crises are mutually reinforcing, turning short-term shocks into long-term instability. Housing affordability in 2026 is not just about housing. This is a collection of three systemic pressures that households feel every day.
The trifecta is creating pressure.
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1. Cost crisis
AARP says basic necessities such as housing, insurance, transportation, food and utilities remain expensive. With retirees looking to spend every penny, it’s safe to assume that AARP is keeping an eye on inflation as people overspend on assets and pensions.
Even a modest home now costs a monthly cost comparable to what you would pay for a luxury item just 10 years ago. For many households, shelter alone consumes far more than the recommended percentage of their income, leaving little room for emergencies.
2. Wage crisis
Income growth has not kept up with the cost of living. USA Today recently surveyed Americans’ sentiment regarding jobs and the cost of living, and a majority of Americans agree that the situation is not very good and there is no hope for the remainder of 2026.
42% of young Americans work paycheck to paycheck and don’t feel like they can afford to pay one more medical bill, car repair, or rent.
Data from Goldman Sachs Asset Management shows that:
“For example, homeownership now accounts for 51% of income, up from 33% in 2000. Meanwhile, medical expenses account for 16% of after-tax income, up from 10% a quarter of a century ago…”
3. Nursing care crisis
Despite being urged to save more for down payments and retirement savings, the costs of child care, medical care and elder care are straining household budgets. The biggest reason women will have to quit their jobs in 2025 will be the cost of caregiving, and the need for individuals to qualify for a mortgage will significantly reduce household income.
The Johns Hopkins Bloomberg School of Public Health just released data on the impact of this year’s premium hikes and how those increases will ripple through.
These forces combine to form a loop in which high costs and stagnant wages reduce savings, limited savings delay ownership, delay in ownership encourages long-term rentals, and rising rents further erode the ability to save.
What the data continues to tell us
The National Association of Realtors’ affordability measures have long hinted at this reality. The median income required to purchase a home now exceeds the median household income in many markets. As the homebuyer population ages, first-time buyers account for a smaller portion of total transactions.
Meanwhile, renting is becoming less of a stepping stone and more of a long-term default.
National Association of Realtors
This is not a failure of personal budgeting. It’s a structural change. More households are simply trying to make ends meet, leading to an increase in long-term renters. When public debate frames affordability as a personal financial issue rather than a systemic issue, we miss the broader forces that are reshaping who can own property and where.
National Association of Realtors
5 ways agents can respond in 2026
Agencies alone cannot solve the affordable housing crisis, but they sit at the powerful intersection of consumer realities, market trends, and local policy. To make a meaningful impact, professionals can focus on:
1. Reframe “Are you eligible?” “Can I keep my home?”
Affordability doesn’t just mean mortgage approval. It has to do with whether a customer can cover housing costs along with utilities, insurance, transportation, food and nursing care. Incorporate big-picture budget conversations into every buyer consultation. We educate you about the financial tools and resources that can help you get the right mortgage and home for you and your clients’ lifestyles and budgets.
The Economic Policy Institute offers a robust household budget calculator that can help shape the conversation and provide the data you need to create a clear picture.
Clients can also take advantage of free tools and classes offered by local Habitat for Humanity chapters to prepare for homeownership. RPR tools are available to real estate agents and provide extensive financial education about local market conditions and options for clients to consider.
Finally, make sure you connect with the best local mortgage professionals who understand what types of mortgages are available to their customers.
2. Understand the true cost of housing in an easy-to-understand manner
By helping your customers paint a complete picture of homeownership, you become more than just a salesperson who doesn’t care about the aftermath of selling a home, you become an expert who can refer them to family and friends they can trust.
Utilities and maintenance can be a deal breaker if overlooked. We assist clients in estimating their actual monthly costs, including heating and cooling efficiency, average electricity bills, water bills, HOA fees, insurance trends, and long-term maintenance.
3. Expanding the definition of affordable housing
Accessory dwelling units (ADUs), modular homes, duplexes, townhomes, multigenerational deals, and more can pave the way to ownership, but only if your agent understands the realities of local zoning, permitting, and financing.
Expertise here is quickly becoming a competitive advantage, but linking to local regulatory frameworks requires an investment of individuals’ personal time.
How do I become an expert? You need to have a solid understanding of the zoning and restrictions in your area. A great place to start is with your local courthouse and zoning office. Replacement housing is often within a certain radius.
There are certain companies and contractors that handle replacement housing, but you’ll need to find out which companies will accommodate and ship to your area. Determining whether a parcel of land is suitable for the type of alternative housing you are trying to provide to your customers is very important and requires thorough investigation. Note that supply constraints are often regulatory as well as financial.
Finally, you should familiarize yourself with well and septic tank protocols, how they connect to local utilities, and associated costs. Becoming a replacement home expert is a lot like ordering new construction, so find a local agent who works with contractors and ask them to guide you toward your goals.
4. Involve policy makers as well as markets
Housing is local, but supply is determined by policy. Agents have first-hand insight into how shortages affect real families. Share those stories with local and state leaders. When those closest to the problem consistently speak up, housing outcomes change.
Share your and your client’s frustrations, challenges, and barriers. It takes almost no effort to write an email or make a phone call. My favorite app to use for calls with state and national governments is 5 Calls. It’s very easy to use and a great way to participate in a variety of topics.
5. Partner with mission-driven builders and nonprofits.
Get involved at the local level with organizations like Habitat for Humanity that build affordable housing. Agents who understand the homebuilding process and how to combine affordable mortgage products, grants, and other tools will have a better understanding of what it takes to achieve more regularly affordable housing in their communities.
The long road to owning a home
This is where the dodo bird analogy becomes uncomfortable. Extinction doesn’t happen overnight. Affordable housing has been in decline for decades.
This polycrisis needs to be addressed holistically, and there is no single panacea that will solve the problem. Nationally, Realtor.com’s economic research team reported data suggesting that at current construction rates, it would take more than seven years for Americans to build up the inventory needed for affordable housing.
Here in Virginia, new Governor Abigail Spanberger has big ideas for how to change zoning laws to allow more affordable housing to be built, but she will have a tough sell because this will require a lot of compromise and change from the wealthy, and will likely be a very difficult mountain to climb.
The housing industry must meet the needs of those who need housing alongside brick-and-mortar construction, and without compromise and innovation, affordable housing will continue to move away from more working Americans for generations to come.
Agents and those in the housing industry have a unique opportunity to step up and work together to move this issue forward. The biggest question is: Which companies will take the time to protect the American Dream, not just for the wealthiest among us, but for those who are essential to our everyday lives?
Agents are more than just transactional intermediaries. Right now, they are front-line witnesses to a system that disappoints more people than it helps. Speak up, be creative, and get involved. The clock says 85 seconds to midnight.
If real estate and housing is your passion, your career, and you believe in the American Dream, you should be the leading authority to help all Americans find their way home.
Rachel Hite is a senior housing counselor, author, and thought leader in real estate and aging. Follow her work on Instagram and LinkedIn.
