Let’s not sugarcoat it: Americans are being priced out of homeownership faster than at any point in modern history. And if you’re in development or investment, this isn’t just a social problem — it’s a market reality you need to factor into your underwriting.

We’ve been building toward this crisis for over a decade. The root cause? A supply hole we never filled after the 2008 financial crisis. Add in today’s lock-in effect — homeowners clinging to 3% mortgages like life rafts — and layer on government policies that make both buying and building more expensive, and you’ve got a system designed to restrict movement.

It doesn’t stop there. Climate change-driven disasters are hitting more properties each year, jacking up insurance costs and introducing new risk into balance sheets. Ownership now carries burdens that many households simply can’t or won’t take on. The result: home sales have collapsed to near-record lows, and one of the pillars of the “American Dream” is quietly eroding.

Why This Matters for Developers and Investors

If you’re in our business, the takeaway is clear — the ownership market isn’t where the growth is right now. Demand is moving toward rentals, build-to-rent communities, and creative ownership structures. Capital is following that shift. The opportunity is in delivering attainable, high-quality housing without assuming buyers can clear the affordability hurdles traditional homeownership now demands.

Meanwhile, the capital markets are sending mixed signals. Just this week, Wall Street doubled down on bets that the Federal Reserve will cut rates soon. Stocks are at all-time highs, Treasury yields are sliding, and traders have fully priced in a September quarter-point cut. If those cuts happen, they’ll lower borrowing costs at the top of the stack — but don’t expect that to magically make homes affordable again. We still have a fundamental supply and cost problem that rate policy alone can’t fix.

Where We Go From Here

The developers and investors who win in this cycle won’t be the ones waiting for the ownership market to “come back.” They’ll be the ones who recognize that the next decade belongs to housing models that meet people where they are — whether that’s renting by choice, co-living, or owning with shared equity.

The dream isn’t dead. But it’s changing — and if you build for the new reality instead of the old one, you’ll be positioned to capture both returns and relevance in a shifting market.