Yes, home prices softened and dropped in several regions in 2025, particularly in the South and West. However, prices did not crash; instead, the housing market experienced a regional correction.
Buying a house can still be a good investment in 2025, but its viability depends primarily on your timeline and whether you plan to live in the home. Here are the key factors to consider:
To comfortably afford a $400,000 house, you generally need an annual household income between $100,000 and $135,000. The exact salary required depends on your specific financial situation, but this range ensures your monthly payments remain manageable.
Economists and real estate experts do not foresee a nationwide housing crash. Instead, the market is characterized by a "recalibration" or correction. While sales volume has declined and some regions are experiencing price drops, a systemic collapse like 2008 is unlikely.
It is highly unlikely you will see 30-year fixed mortgage rates near 3% again anytime soon. Financial experts and the Morgan Stanley analysis indicate that rates dipping that low would likely require another major economic catastrophe or a severe, unexpected global recession.
A $500,000 mortgage at a 6% interest rate will cost $2,998 per month in principal and interest on a 30-year fixed loan. Over the life of the loan, you would pay a total of roughly $1,079,219, which includes about $579,219 in total interest.
Most housing experts and major financial institutions consider a drop to 5% highly unlikely in the near term. The vast majority of current forecasts project the 30-year fixed mortgage rate to hover in the upper-5% to mid-6% range.
Most housing economists and industry experts do not forecast a widespread market crash. Instead, the market is broadly characterized as going through a prolonged "reset" or stabilization phase, defined by constrained inventory, stricter lending standards, and high but flattening home prices.
The answer: About $250,000 per year or more
Multiple example calculations estimate you'd need a salary of at least $250,000 per year to afford a million-dollar home. If you can afford a higher down payment, you can borrow less and reduce your monthly payment.
Why 2026 could finally be a good time for home buyers. After two years of volatility with mortgage rates and home prices, the 2026 housing market could feel almost calm — by comparison, anyway. While inflation hovers at 2.7% year-over-year, mortgage rates are down. Way down, in fact.
A $100,000 salary can support a wide home price range.
With this income level, many buyers can afford a home between $300,000 and $450,000, depending on factors like credit, down payment, debt-to-income ratio and current mortgage rates.
Yes, a 70-year-old woman can absolutely get a 30-year mortgage. Under the Equal Credit Opportunity Act, lenders are legally prohibited from discriminating against applicants based on age. Approval is based entirely on your ability to repay the loan, supported by your credit score, income, assets, and debt.
Realistically, buying a $300,000 house on a $50,000 salary is very difficult without massive savings or outside help. Based on standard lending practices, a $50,000 salary typically limits your maximum home purchase price to around $150,000 to $200,000.
What's The Cheapest Month To Buy A House? Generally, home prices are lowest in January because demand is low, inventory is low and fewer buyers are looking for homes. While January might be the best month to get the lowest price on a home, you pick from a smaller selection of homes.
The Risks
Renting is best for those who don't plan to live in an area long, want a lower monthly payment and don't want to dealwith maintenance. Buying is best for those who plan to stay in a home for at least two years, want full control over their property and don't need to pull money from investments for a down payment.
No, it is no longer the norm. About 40% to 50% of Americans in their 60s carry a mortgage into retirement, a percentage that has steadily increased. For more on modern financial planning around housing, you can read the Charles Schwab Guide on Mortgages in Retirement.
Based on the Rocket Mortgage affordability calculator, a home shopper with a $70,000 annual income, $21,000 in monthly debts, $14,000 in cash available for the purchase, and a credit score of at least 720 may be able to afford a home of around $233,000 with a 6.5% interest rate.
$190,422. Source: Economic Policy Institute, based on 2023 Social Security data. Data from the 2022 census found that households at the highest quintile (incomes higher than 80% of other earners) had a mean income of $297,300 per year. The top 5% of households had a mean income of $526,200. 4.
No, the housing bubble will not burst in 2026. Instead of a catastrophic crash, real estate experts project a gradual normalization or "reset" where home prices remain stable or experience modest single-digit growth as incomes catch up to elevated values.
Buy now if you have a stable income, have saved for a down payment, and plan to stay in the home for at least 5–7 years. Wait if your finances are tight, you are trying to time interest rate drops, or you plan to move soon.
Even seeing a portfolio shed 10% of its value in short order – commonly defined as a stock market correction rather than crash – can be nerve-racking. The 20%+ fall in a short timeframe that constitutes a crash can be much worse to experience. But what if the crash is even worse than that?
"Check out my new credit cards."
We get it, you want to buy things for your new home. The bad part is you're adding extra debt to do it. Telling your lender you've opened up or applied for several new credit cards may not go over so well. Wait until after you finish buying the home to make those big purchases.
A $400,000, 30-year mortgage typically costs between $2,400 and $2,900 per month in principal and interest alone. However, your exact monthly payment depends heavily on the interest rate, down payment, and local escrow costs (taxes and insurance).
The 3-7-3 Rule is a federal mortgage regulation enforced by the Consumer Financial Protection Bureau (CFPB) designed to prevent hidden fees and protect homebuyers from being rushed into signing their final paperwork.