Shrinking budgets: How higher mortgage rates have affected buying power

In 2025, homebuyers are facing a vastly different affordability equation than they did in 2019. While wages have grown a solid 15.7% over the past six years, rising mortgage rates have outpaced those gains, cutting deeply into what buyers can afford. At the same time, home prices have continued to climb and inventory has thinned relative to the pre-pandemic period.