The Housing Squeeze: Why It’s So Hard to Buy (or Rent) in 2025 | Thomas Kane Keep IT Simple

If you're trying to buy a home, rent an apartment, or just stay where you are without your costs jumping—2025 has probably been rough. Housing prices are climbing again, rents are near record highs in many cities, and even people with decent incomes are feeling the squeeze.

What’s going on? And why does the American dream of owning a home—or even just affording a one-bedroom—feel further away than ever?

Let’s break it down.

What’s Driving the Housing Crunch in 2025?

There are several overlapping reasons, but here are the key ones—no fluff:

• Low housing supply. We simply don’t have enough homes to meet demand. Years of underbuilding after the 2008 financial crash created a long-term shortage. In many cities, zoning laws and red tape make it hard to build new housing quickly.

• High interest rates. Mortgage rates remain high (hovering between 6–7%), which discourages both new buyers and current homeowners from selling. That means fewer homes on the market and less movement overall.

• Rising rents. Renters face steep increases, especially in growing cities where demand far outpaces supply. Many landlords are passing along costs like insurance, taxes, and maintenance.

• Inflation and wage stagnation. Prices have risen across the board, but incomes haven’t kept up—making both renting and buying less affordable for the average worker.

Who’s Being Hit the Hardest?

Young professionals, first-time buyers, and lower-income families are bearing the brunt. Many millennials and Gen Zers who saved for years to buy are now being priced out—either by the sticker shock of high home prices or the bite of monthly mortgage payments.

Meanwhile, renters in cities like Austin, Phoenix, and Atlanta are facing double-digit rent hikes with little relief in sight. The competition is fierce: one-bedroom apartments receive dozens of applications in a matter of days.

Even middle-class families who bought years ago are struggling with increased property taxes, insurance premiums, and maintenance costs—all of which are creeping up faster than expected.

Is There Any Relief Coming?

Some, but not fast.

• New construction is picking up, especially in suburban and Sun Belt areas—but it takes time, and not all new builds are affordable.

• Some cities are reforming zoning laws to allow for more multi-family housing and smaller units, but local politics often slow the process.

• Government programs for first-time buyers and renters do exist—but they’re often hard to qualify for or underfunded.

So, while change is happening, it’s moving at a snail’s pace compared to the urgency people are feeling.

Thomas Kane’s Take – Keep IT Simple:

Let’s not sugarcoat it: the U.S. housing market is broken for a lot of people in 2025. It’s not just about supply and demand—it’s about how little we’ve adapted to a growing population, economic shifts, and a younger generation that’s ready to own but stuck renting.

Here’s what you can do right now:

• If you’re renting: Start tracking your local market and negotiate early. Consider moving to less competitive areas—even slightly outside city centers.

• If you’re buying: Get pre-approved and be patient. Look at homes under your max budget so you have room to compete or absorb future costs.

• If you own: Make a long-term plan. Refinance if rates drop. Don’t rush to sell unless you truly need to—inventory is still tight, and demand is strong.

Most importantly: stay informed and make decisions based on your actual financial situation—not fear or hype. Housing may feel impossible right now, but with strategy and patience, you can still make moves that work for you.