US housing crisis deepens as mortgage rates soar and sales hit 30-year lows
The US housing market is facing major shifts as mortgage rates climb and home sales drop. Baby Boomers still hold a large share of property wealth, while younger buyers struggle with higher borrowing costs. At the same time, rents are stabilising in many cities due to a surge in new apartment construction. Mortgage rates have more than doubled since the pandemic lows of under 3%. As of late March 2026, the average 30-year fixed rate stood at 6.38%. This sharp rise has cut the share of homeowners with rates below 4% to just 50.6% by the end of 2025.
Existing home sales have fallen to their lowest point since 1995. Since 2023, transactions have remained about 25% below 2019 levels. The slowdown reflects both affordability pressures and many homeowners holding onto low-rate mortgages. On the rental side, vacancy rates hit a record 7.4% in early 2026. Increased multi-family construction and conversions of offices into flats have eased demand. As a result, rents in major metro areas have stopped rising and begun to dip in some places. Immigration trends have also shifted. New arrivals now contribute more to the renter pool than to single-family homeownership. Meanwhile, Baby Boomers—still the largest generational group—continue to own a substantial portion of US residential real estate. With housing-related activity making up roughly one-sixth of GDP, these changes carry broad economic consequences.
The housing slowdown shows no signs of reversing quickly. Higher mortgage rates and tight affordability keep sales depressed, while the rental market adjusts to oversupply. The imbalance between older property owners and younger buyers will likely shape the market for years to come.
