(Nexstar) – Housing costs are continuing to rise for many Americans. A recent report indicated that the median monthly cost for homeowners has increased to $2,035, up from $1,960 in 2023, factoring in inflation, according to data from the US Census Bureau.
Homeowners with mortgages typically allocate around 21% of their income to cover mortgage payments, insurance, taxes, utilities, and other expenses, as noted in the report.
Overall, the increasing mortgage rates are a key factor in this trend. While home prices have been declining recently, sales prices have actually risen, with a recent report from Redfin showing the median selling price at about $393,000, marking a 1.7% increase over the year.
At the same time, home sales are sluggish. Numerous sellers have removed their listings, as reported by Redfin analysis, and while some areas are starting to stabilize, others may take years to recover.
In an interesting turn, the Trump administration seems to be stepping in. Treasury Secretary Scott Bessent recently mentioned that a national housing crisis might be declared this fall. His comments, however, lacked specific details, but he noted that this could lead to standardizing codes at local levels, potentially lowering construction costs.
Daryl Fairweather, Redfin’s chief economist, indicated that addressing local building regulations could be beneficial. She emphasized the need to relax some restrictions that currently hinder builders from constructing where the demand is greatest, especially near federally funded projects.
Fairweather believes that increasing new home construction is crucial for mitigating housing shortages. Despite some building activity during the pandemic, she pointed out that many people still find homeownership out of reach.
She also highlighted the burdens on the construction sector tied to the Trump administration’s policies, mentioning how tariffs and immigration enforcement have impacted both costs and workforce availability. There are suggestions that policy changes could aid the construction industry moving forward.
“More supply can help alleviate the situation,” Fairweather noted.
Where Housing Costs are Highest
Every state sees mortgage holders spending at least $1,200 monthly on various housing-related expenses. Newly released census data for 2024 indicates that in places like Columbia and California, monthly housing costs surpass $3,000, while Hawaii follows closely at around $2,937.
The data also shows that in Hawaii, homeowners allocate about 25% of their monthly income to these costs, which is quite substantial.
On the flip side, West Virginia has the lowest monthly expenses for mortgage holders, at approximately $1,272, making up about 16% of the median income there— the most affordable rate in the nation.
Interestingly, only three states—West Virginia, Virginia, and Vermont—are seeing slight decreases in monthly housing costs from 2023 to 2024.
There’s an interactive map available that breaks down median monthly housing costs by state for these two years, highlighting what mortgagers spend relative to their incomes.
The administration’s efforts may focus on new constructions and housing developments, but there may also be potential relief for existing homeowners. President Trump previously speculated that the Federal Reserve might implement significant interest rate cuts, which indeed occurred, with the Fed lowering its short-term rate from 4.3% to around 4.1% recently.
While interest rates aren’t mortgage rates directly, they often move together due to similar economic factors, including job markets and bond markets.
This month, the average rate for a 30-year fixed mortgage in the U.S. was noted at 6.35%, marking the lowest point in almost a year, compared to 6.2% a year earlier.
