For millions of Americans, buying a home feels like chasing a moving target. Prices are rising faster than wages, starter homes are harder to find, and even middle-class families are struggling to compete. The dream of homeownership once a defining feature of the American middle class is slipping further out of reach.
Why is this happening, and what’s preventing relief? A closer look reveals that rising house prices are not the result of a single factor but rather a complex web of supply shortages, market incentives, government policy, and economic realities.
This article draws on insights from Deseret News and expands on the forces shaping today’s housing market, what’s being done to address them, and what it all means for the future of homeownership in America.
The Scale of the Problem
Let’s start with the numbers.
-
In Salt Lake County, Utah, the average price for a single-family home is about $567,066, while neighboring Utah County stands at $547,582. A decade ago, Salt Lake’s median home price was around $272,000 meaning values have more than doubled in just ten years.
-
Nationwide, cities like Phoenix, Miami, Dallas, and Atlanta have seen similar spikes, with some markets recording 50%–100% growth in less than a decade.
-
For young adults and first-time buyers, saving for a down payment is increasingly unrealistic. In many cities, it could take a typical household more than a decade of disciplined saving just to afford 20% down.
The result is a widening gap between renters and homeowners. Those who bought before the boom are sitting on growing equity. Those entering the market today face crushing debt or the possibility of being permanently priced out.
Why Supply Can’t Catch Up
At the heart of the problem is a fundamental imbalance: demand for housing outpaces supply. But why is supply so constrained?
1. Builders Shifted Away from Starter Homes
In past decades, developers built significant numbers of affordable “starter homes.” Today, most new construction targets higher-end markets. Luxury single-family homes, expansive suburban developments, and expensive condos offer higher profit margins than modest houses.
Even though smaller homes are being built, they’re not necessarily affordable. Land, labor, and material costs still keep prices high.
2. Existing Owners Are “Locked In” by Mortgage Rates
Millions of homeowners refinanced or bought homes during periods of historically low mortgage rates. Now, with interest rates much higher, they have little incentive to sell. Why trade a 3% mortgage for a new one at 6% or more?
This “lock-in effect” means fewer homes hit the market, keeping supply tight and bidding wars fierce.
3. Regulations and Zoning Restrictions
Local zoning often favors single-family homes on large lots, discouraging denser and more affordable developments like duplexes, triplexes, or townhomes.
Environmental reviews, permitting delays, and neighborhood opposition (so-called NIMBYism “Not in My Backyard”) further complicate and slow down housing projects. The result is fewer units built, especially in high-demand urban and suburban areas.
The Role of Costs and Policy
Beyond supply shortages, broader economic and policy factors contribute to rising prices.
Rising Construction Costs
-
Tariffs on Canadian lumber and other imported building materials increase construction costs, which are passed on to buyers.
-
Supply chain issues and inflation make materials more expensive and harder to source consistently.
Labor Shortages
The construction industry faces a shortage of skilled workers, worsened by immigration restrictions and declining interest among younger generations in trades. With fewer laborers, projects take longer and cost more.
Insurance and Risk
As climate risks like wildfires, hurricanes, and flooding intensify, insurance rates rise. Builders and buyers alike face higher costs when developing in vulnerable areas.
Government Incentives (or Lack Thereof)
Federal and state programs intended to encourage affordable housing often fall short. Tax incentives may favor larger projects, while subsidies for low-income housing don’t address the “missing middle” — working families who earn too much for subsidies but not enough to afford market rates.
Interest Rates: A Double-Edged Sword
When interest rates rise, it usually cools housing demand by making borrowing more expensive. But in today’s market, high rates also freeze supply because homeowners don’t want to give up their low mortgage terms.
On the flip side, when rates eventually drop, pent-up demand could flood the market, triggering another surge in prices. In other words: rates can slow the market temporarily, but they don’t solve the fundamental supply shortage.
What’s Being Tried and Where It Falls Short
Policymakers know housing is a crisis, and many are working on solutions. Still, challenges remain.
Utah’s Ambitious Housing Goal
Utah Governor Spencer Cox has set a target of building 35,000 new starter homes by 2028. The plan calls for higher density projects and more affordable condos. But delays from regulations and insurance obstacles threaten progress.
Deregulation and Zoning Reform
Some states are experimenting with loosening restrictions allowing duplexes in single-family neighborhoods, streamlining permitting processes, and incentivizing builders to include affordable units.
However, these measures often meet stiff resistance from local residents concerned about neighborhood character, traffic, or property values.
Federal Action
At the federal level, housing policy has been slow to adapt. While there’s growing recognition that housing affordability is a national crisis, reforms tend to be piecemeal and politically divisive.
The Bigger Picture: Why This Matters
The affordability crisis goes beyond personal finances. It has ripple effects across society:
-
Generational Wealth Gaps: Homeownership is the primary way many families build wealth. If younger generations are locked out, inequality deepens.
-
Labor Mobility: Workers may turn down jobs in high-cost cities because they can’t afford housing there, which stifles economic growth.
-
Family Planning: Couples delay marriage, children, or retirement planning when housing feels unattainable.
-
Mental Health: The stress of competing in a hostile housing market constant bidding wars, rising rents, and financial pressure takes a toll.
Possible Paths Forward
While there’s no silver bullet, experts suggest a combination of reforms could help:
-
Build More Diverse Housing Types
Encourage townhomes, duplexes, and small multifamily buildings to meet a range of income levels. -
Reform Zoning Laws
Shift away from restrictive single-family zoning toward higher density, especially near transit and job hubs. -
Invest in Skilled Trades
Expand training programs and immigration pathways to address labor shortages in construction. -
Rethink Regulation
Streamline permitting and environmental review processes without sacrificing safety or sustainability. -
Targeted Subsidies and Incentives
Offer down payment assistance and tax credits for first-time buyers while incentivizing builders to deliver affordable starter homes. -
Climate-Resilient Development
Balance growth with sustainability by encouraging housing in safer areas while investing in resilient infrastructure.
Conclusion: A Future at Risk
The U.S. housing market is stuck in a cycle of rising demand, constrained supply, and ever-climbing prices. Unless bold reforms and large-scale building initiatives take place, the dream of homeownership will drift further from reach for millions.
What’s clear is this: waiting for the market to “fix itself” is not an option. Without intervention, today’s affordability crisis could become tomorrow’s entrenched housing inequality.
For now, prospective buyers will need patience, strategy, and resilience and policymakers will need to confront hard trade-offs if they truly want to make housing affordable again.
Source: Deseret News, “Why house prices keep climbing,” Jay Evensen, July 4, 2025.
https://www.deseret.com/opinion/2025/07/04/house-prices-will-just-keep-climbing/