The homeownership affordability gap is the distance between what a home costs to buy and what the average household can actually afford. Right now, that gap is wider than it's been in roughly a decade. If you've been watching home prices and mortgage rates with growing concern, you're not misreading the numbers. But the full picture is more complicated than the headlines suggest — and some options exist that most buyers never hear about.

How Wide Is the Homeownership Affordability Gap Right Now?

The numbers are stark. According to Redfin's 2025 housing affordability research, more than 75% of homes currently listed for sale are unaffordable to the typical American household. That's not a slight stretch. For many buyers, this gap is measured in tens of thousands of dollars of annual income.

Per Redfin's analysis, a household needs to earn approximately $116,633 per year to comfortably afford the median-priced U.S. home — based on spending no more than 30% of gross income on housing. Median household income in the U.S. sits closer to $80,000. So the gap is roughly $33,000 to $36,000 of annual income that most buyers simply don't have.

Here's a quick snapshot of where things stand as of late 2025:

Sources: Redfin 2025 housing affordability analysis; U.S. Census Bureau American Community Survey.

What These Numbers Actually Mean for the Average Buyer

The monthly payment gap is one piece of this. But the down payment barrier is just as significant. A 20% down payment on a median-priced U.S. home now represents nearly four years of average apartment rent payments, per Redfin's 2025 affordability research. Most renters aren't sitting on that kind of savings. And if they're spending $2,200 a month on rent, building it up takes time.

We hear this a lot from buyers we work with in Colorado and Florida. They're often not far off from qualifying — but the combination of elevated prices, rates above 6.5%, and a large down payment target feels like three walls at once. The income gap alone would be manageable for some. The down payment alone would be manageable for others. Together, they create a real wall for most.

According to Redfin's 2025 market data, the typical monthly cost of buying a home has reached approximately $4,643 — more than double the average monthly rent of $2,228. That 108% "owning premium" is real. But it doesn't tell the whole story of what buyers gain — or give up — by staying on the sidelines.

Renting vs. Buying — The Trade-Off Most People Get Wrong

Here's where the standard affordability conversation misses something. The monthly cost comparison — $4,643 to buy vs. $2,228 to rent — shows what you pay today. It doesn't show what you build over time. And that gap is enormous.

According to the Federal Reserve's 2022 Survey of Consumer Finances, the median net worth of homeowners was approximately $396,200, compared to just $10,400 for renters — a gap of nearly $386,000. This isn't because homeowners earn more. It's largely because ownership forces a form of savings — every mortgage payment builds equity, while every rent payment goes to someone else's balance sheet.

So yes — buying costs more each month right now. But renters who wait for conditions to "get better" are also not building wealth during that time. We're not saying the monthly gap doesn't matter. It does. But the decision to buy or wait has a real cost on both sides of the ledger, and most affordability discussions only show one side.

Real Options for Buyers Facing the Affordability Gap

The gap is real. But some buyers have more paths forward than they realize. Here's what we actually see working for buyers right now.

Builder Incentives and Rate Buydowns

According to the National Association of Home Builders (NAHB), 61% of builders reported offering sales incentives in 2024, including mortgage rate buydowns, to attract buyers. A permanent or temporary rate buydown can meaningfully reduce your monthly payment — sometimes by $200 to $400 per month on a new construction home. This doesn't close the full affordability gap, but it can make a real difference for buyers on the edge of qualifying.

Lower Down Payment Programs

The 20% down payment is a benchmark, not a requirement. FHA loans allow a down payment as low as 3.5% with a credit score of 580 or higher, per HUD guidelines. Conventional loans backed by Fannie Mae and Freddie Mac allow as little as 3% down through programs like HomeReady and Home Possible. These programs don't eliminate the monthly payment challenge, but they do lower the cash needed to get started.

Down Payment Assistance

Many buyers don't know that state and local programs offer grants or forgivable loans to cover part of the down payment. Colorado's CHFA, for example, offers assistance for qualifying buyers through its network of approved lenders. These programs vary by income and purchase price, so they don't work for everyone. But for buyers who are close, they can make the difference. You can review what's available at the Colorado Housing and Finance Authority's website.

For a full look at what programs exist based on your situation, our down payment options guide covers what's actually available for buyers in Colorado and Florida.

What the Affordability Gap Looks Like in Colorado and Florida

National numbers tell one story. Local markets tell another. Per the National Association of Realtors, active housing inventory in many Northeastern and Midwestern markets remains 40% to 60% below pre-pandemic levels, while the South and West have seen more meaningful supply recovery. Colorado and Florida fall into that second group, which means buyers in these states have seen some improvement in available homes — though prices remain elevated.

In Colorado specifically, high prices in the Front Range push the affordability math harder than the national median suggests. But the state has more inventory than it did in 2021 and 2022, and builder activity has added supply in suburban markets. If you're buying in Colorado, working with a local Colorado mortgage broker who knows these market dynamics can help you find options that fit your budget.

Florida tells a similar story. Inventory has grown in many markets, especially in South Florida and along the Gulf Coast. But prices remain high relative to local wages. Buyers there often benefit from exploring a range of loan programs beyond the conventional path. A Florida mortgage broker familiar with the state's market can help match you to programs that fit your income and purchase goals.

The CFPB's owning a home resource center is a useful starting point for understanding how lenders evaluate your application — regardless of which state you're buying in.

Frequently Asked Questions