What Happened?

Housing affordability pressures that once fell mainly on low-income Americans are now squeezing the middle class, according to a Congressional Research Service report updated Sept. 25. Among renters earning $45,000 to $74,999 a year, the share spending more than 30 percent of their income on housing rose from 39 percent in 2019 to 48 percent in 2024.

Two new laws passed during the current Congress address pieces of the problem, but several major policy questions remain unresolved.

Why Does it Matter to Me?

Nearly one out of every two Americans spend almost half their tax home pay on housing.

The numbers behind this report reflect conditions in your market. Thirty-year fixed mortgage rates ran between 6.05 percent and 6.67 percent for the first eight months of 2026, are well above the sub-3 percent rates many buyers locked in during 2021. Rates spiked to 7 percent this month, making matters worse for potential home buyers.

That gap makes it harder for current renters to become buyers, and harder for existing homeowners to move without giving up a low rate.

Homeowners insurance rates rose faster than inflation in 44 states and the District of Columbia between 2020 and 2025, and U.S. insured natural disaster losses reached $107 billion in 2025. Those rising insurance costs add directly to monthly housing expenses for both owners and renters, since landlords typically pass them along.

On the supply side, single-family housing starts stood at roughly 940,000 in 2025, well below the 1.5 million to 1.7 million built annually before 2007. Fewer new homes means more competition for the ones that exist, which keeps prices and rents elevated.

Both Sides, Now

The fiscal year 2025 budget law, signed July 4, 2025, expanded the Low-Income Housing Tax Credit (LIHTC), the federal government's main tool for financing affordable rental housing, and made permanent the mortgage interest deduction limits and Opportunity Zone program from the 2017 Tax Cuts and Jobs Act.

The 21st Century ROAD to Housing Act became law in July without the president's signature. It bars companies owning 350 or more single-family homes from buying additional properties starting Jan. 7, 2027, streamlines environmental reviews for infill and affordable housing, and expands Community Development Block Grant eligibility to include new construction.

The Trump administration has proposed eliminating certain fair housing rules and restricting noncitizen eligibility for rental assistance. The House Appropriations Committee explicitly criticized the noncitizen eligibility proposal as "contrary to the intent of Congress." That disagreement between the executive branch and Congress over who qualifies for federal rental help has not been resolved.

What Happens Next?

Several unresolved questions face Congress before the 119th Congress wraps up. Fannie Mae and Freddie Mac, the two government-backed mortgage giants placed under federal control in 2008, remain there. The Trump administration has expressed interest in returning them to publicly traded status, but Congress has not acted.

Reauthorization of the Native American Housing Assistance and Self-Determination Act and the National Flood Insurance Program also remain pending. The flood insurance program, which millions of homeowners in flood-prone areas depend on, has been extended repeatedly through short-term patches rather than a long-term fix. Without congressional action, each of these items carries into the next session with no resolution in sight.

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