The long road home: Examining the global housing affordability crisis

Global housing affordability will remain under pressure because structural supply shortages, high financing costs and rising ownership expenses are outweighing recent policy support.

• In the U.S., buying a median-priced home requires 43% of median household income, above the traditional 30% affordability threshold; the required income exceeded $100,000 in 169 of 387 metro areas in 2025, versus 31 in 2020.
• Mortgage rates above 6% are sustaining a lock-in effect, while J.P. Morgan expects the 10-year Treasury yield to reach 5.05% by end-2026 and the average 30-year fixed mortgage rate to approach 7%; U.S. home prices are forecast to be flat in 2026 and rise 3% in 2027.
• Rental affordability is also strained: 23% of renters were behind on rent at some point in the past year, while Austin rents fell 5.1% year over year and San Francisco and San Jose rents rose 6.3% and 5.4%, respectively.
• The U.S. 21st Century ROAD to Housing Act and a directive for Fannie Mae and Freddie Mac to purchase $200 billion of agency MBS are unlikely to provide near-term relief because implementation may take 12 to 24 months or longer and Treasury yields remain elevated.
• Housing stress is global but differs by market: affordable housing fell to 6% of launches in India’s eight largest cities from 52% in 2018, Australia is slowing after its 2022 peak, Canada’s 2026 home-sales outlook was downgraded, and China remains in a multi-year, quantity-led housing adjustment.
• JPMorganChase’s American Dream Initiative commits $750 billion through 2035 to finance 1,000,000 affordable housing units and help 500,000 customers purchase homes, including 200,000 first-time buyers.

Takeaway: Investors should expect housing affordability to remain a persistent constraint rather than a problem solved by current policy, while regional differences in supply, rates, rents and regulation will determine market outcomes.