Market Forces May Drive Down Home Prices
FOX Business host Charles Payne shared insights on Friday, suggesting that rising affordability pressures could lead to a decline in home prices.
Over the past 25 years, U.S. home prices have nearly tripled, pushing the median cost above $410,000. This trend has seen the median age of first-time buyers rise to 40, partly due to higher mortgage rates. During the Trump administration, measures were taken to restrict institutional purchases of single-family homes while also directing Fannie Mae and Freddie Mac to invest $200 billion in mortgage-backed securities to help lower borrowing costs. However, Payne noted during his appearance on the “Special Report with Bret Beyer” that these efforts have only offered limited relief.
“They’re making marginal progress,” Payne commented. “But this is the toughest affordability crisis we’ve seen. To return to 2009 affordability levels, three things need to happen: a 56 percent increase in revenue—unlikely in the short term—or a 35 percent drop in housing prices, or mortgages needing to drop as low as 2.65%. It’s a tough challenge, and the White House is trying hard to make any possible adjustments. Plus, we really need more housing supply.”
He further mentioned that a shift in mortgage rates and the current cost gap between renting and owning could trigger a market correction.
“We want to see mortgages decrease. One should expect basic economic principles to come into play. Right now, renting is significantly cheaper than owning a home. Historically, when this occurs, home prices tend to fall,” Payne explained.
The surge in housing costs has been increasingly burdensome for Americans, with prices escalating and supply struggling to meet demand. In June 2025, the average price for a single-family home reached an unprecedented high of $432,700, according to Trading Economics, which cited data from the National Association of Realtors. A report from Goldman Sachs in October 2025 indicated that construction of 3 to 4 million additional homes would be necessary to address shortages and improve affordability.
The percentage of first-time homebuyers has dwindled, plummeting to a record low of 21%. In the same month, the Trump administration revealed intentions to introduce 50-year mortgage terms aimed at making homeownership more accessible.
