Why Are Affordable Homes So Hard To Find?

Ever feel like everything just keeps getting more and more expensive? It isn’t just groceries and gasoline. For home buyers, affordability is a growing concern, and there are many reasons for it.

Home Builders: As of 2025, over 50% of ALL homes that exist in the US were built before 1980. Less homes have been built nationally since the 2007-2008 financial crisis, though Texas has fared better than the other 49 states in this category. In the late 1970’s and early 1980’s roughly one third of new homes were (under 1500 square feet) starter homes. By the 2020’s homes of a similar size make up less than 10% of new builds. Builders have been building less homes, and on smaller lots. Part of the reason has to do with local zoning restrictions and other regulations. These are the rules that dictate what builders are allowed to build, and where. Builders can build a larger homes on the same size lots used in yesterday’s starter homes, which gives them a chance to make more money.

Interest Rates: Today’s rates are still more than double what they were a few years ago. Not only does that effectively price some buyers out of the market, but it also makes someone who doesn’t HAVE to move more reluctant to buy a newer home. Why pay over 7% when your current mortgage is right around 3%? That’s a very common discussion in this market.

Building Costs: Building homes is expensive. Inflation has weakened the buying power of our currency, which means materials and labor cost more, and pushes the price of homes up even further. In fact, home prices on average are up over 50% since 2020. 

The Result: The demand for homes still outweighs the supply nationwide, and that doesn’t appear to be changing soon. All these factors (and more) have caused the price of single family homes to climb, which has created an affordability dilemma for many homebuyers.