Homeownership is slipping through the floorboards. First-time buyers now account for just 21.8 percent of total home purchases, the lowest share ever recorded. That’s down from 34 percent in 2019 and signals a deeper affordability breakdown. Existing home sales are projected to reach 4030000 in 2025, marking the slowest housing market in more than 25 years. That figure falls below the 4120000 recorded during the bottom of the 2008 crash.
National median price now sits at $422,800. That’s up 1.3% year-over-year. Slower than the last five cycles. Rates on 30-year fixed mortgages average 6.72%, per ICE’s latest July print. That’s down from 7.15% in May but still elevated. To qualify for a median-priced home using standard underwriting, you now need an income near $127,000. That filters out nearly 86% of American renters.
Delinquencies are compounding. Total delinquency reached 3.20% in June. FHA loans show the steepest deterioration. Serious delinquency, loans more than 90 days late, rose 14.1% compared to last summer. Foreclosure starts climbed 17% year-over-year. In places like Cape Coral, 27% of 2023 and 2024 FHA loans are already underwater. In Austin, 18% of 2022 loans are carrying negative equity.
Student loan payments resumed in May. That’s punching holes in mortgage performance. Borrowers with student debt are 4x more likely to default on home loans. Nearly 30% of FHA borrowers carry student debt. ICE lists more than 1,300,000 loans as “non-current” but not yet classified delinquent. The stress isn’t projected. It’s active.
Builders are pumping incentives. National average discounts now sit at 13.3% per deal. That includes buydowns, closing offsets, and cash rebates. Yet new construction volume dropped 6.00% year-over-year. Every time Treasury yields tick up, cancellations follow. Buyers walk. Inventory stacks. Capital exits.
The housing system is weakening structurally. Pricing sits high. Liquidity thins. Borrower capacity fades. New buyers don’t qualify. Delinquencies rise. Builders retreat. The data shows a system bending past its limits.
Sources
https://mortgagetech.ice.com/resources/data-reports/july-2025-mortgage-monitor
https://www.realtor.com/news/real-estate-news/pending-home-sales-drop-5-5-to-all-time-low-in-july
https://www.credaily.com/briefs/first-time-buyers-drop-boosts-rental-market-gains
https://www.yahoo.com/news/number-first-time-home-buyers-165441473.html
https://www.thompsonkane.com/mortgage-housing-market-update-economic-news-07-11-2025