1933: The Housing Affordability Crisis, Explained. Who Can Still Buy a Home?
So Money with Farnoosh Torabi
Farnoosh Torabi
4.7 • 2K Ratings
🗓️ 19 January 2026
⏱️ 40 minutes
🧾️ Download transcript
Summary
If you’ve been scrolling listings at midnight, doing mental math on mortgage calculators, and wondering, “Wait…how is anyone actually buying a house right now?” you are not alone.
My guest today is Alex Gailey, personal finance reporter at Bankrate, and she’s been digging into the numbers behind America’s housing affordability crisis. Her reporting found something jaw-dropping: the typical U.S. household can’t afford three-quarters of the homes currently on the market.
In this conversation, we’re going to break down what’s driving the affordability squeeze — from the “lock-in effect” of homeowners clinging to 3% mortgages, to the widening gap between incomes and housing costs, to the new reality that many buyers are spending closer to 40%+ of their income just to make the monthly payment work.
Alex also shares where in the country buyers still have a real shot, what she’s hearing from successful first-time buyers about the real keys to getting in (hint: flexibility, patience, and boundaries), and why renting can be a smart wealth-building move when buying would make you house-poor.
Plus: we talk about the rise of unconventional paths to homeownership — buying with friends or family, “house hacking,” down payment help — and what all of this signals about the future of the American Dream, especially for millennials and Gen Z.
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Transcript
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| 0:00.0 | So Money episode 1933, the housing affordability crisis explained who can still buy a home. |
| 0:09.0 | You're listening to So Money with award-winning money guru Farnoosh Karabi. Each day, get a 30-minute |
| 0:15.4 | dose of financial inspiration from the world's top business minds, authors, influencers, and from Farnoos |
| 0:21.7 | yourself. |
| 0:22.7 | Looking for ways to save on gas or double your double coupons? |
| 0:26.9 | Sorry. |
| 0:27.9 | You're in the wrong place. |
| 0:28.9 | Seeking profound ways to live a richer, happier life. |
| 0:32.7 | Welcome to So Money. |
| 0:36.2 | The financing side, there's definitely misconceptions, and one of those, one of the biggest |
| 0:42.2 | that I see and that we see in the data, is that you need to have 20% down to home. |
| 0:48.0 | And we see that in our data, about a third of Americans believe that. |
| 0:51.9 | And that is just not the case. |
| 0:53.6 | When the median price home is $400,000, |
| 0:56.5 | it's unrealistic to expect people to come up with an $80,000 down payment. |
| 1:01.6 | And a lot of people write themselves off and just think, |
| 1:03.6 | oh, I can be, I don't have 20% down. |
| 1:06.5 | Welcome to So Money, everyone. |
| 1:07.7 | I'm Farniush Tarabi. |
| 1:09.1 | Happy Dr. Martin Luther King Jr. day here in Montclair. I was reminded that Dr. King visited our high school back in 1966, and there were protests. There's a picture of him that I found, and it was quite an inflection point in our town that year. There was a big |
| 1:29.1 | lawsuit that led to the desegregation of our schools. My daughter is actually entering a |
| 1:36.2 | poetry contest for the best poem dedicated to MLK and that's due at the end of the month. So |
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