Even a mortgage rate of 0% would not make the purchase of an affordable house in these 6 American cities

During the pandemic, buyers experienced mortgage rates less than 3%, which inaugurated a wave of owners for the first time. But at the end of 2023, mortgage rates had peaked at 8% and today remain almost 6.5% at 7%. That – in combination with the prices of houses which are greater than 50% that 2020 – locked up new house buyers to penetrate the market and the current owners of the sale.

Zillow reported this week that there would be mortgage rates at around 4.43% to make an affordable middle house for a typical buyer. But Zillow’s economic analyst Anushna Prakash said it was “unrealistic” given the massive drop necessary to get there.

But even if mortgage rates fell to 0%, Prakash said, an average house would remain unaffordable in certain large metropolitan areas, according to Zillow.

These include:

• new York
• Los Angeles
• Miami
• San Francisco
• San Diego
• San Jose

Indeed Fortune.

“The reality is that buying on the market, especially in Manhattan or a bonus, Brooklyn still requires a significant amount in cash,” said Griffith. “The inventory is tight and the competition is high, so the cost of the property itself is what maintains most of the buyers on the sidelines.”

Between May 2020 and May 2025, the price index of Case-Shiller houses, which is widely used to measure the prices of American residential real estate, jumped more than 51%.

Although mortgage rates certainly make monthly payments more expensive, said Griffith, affordability “concerns the overall price” more.

“Buyers care about prices, of course, but what really matters is to have enough for the deposit and the fee costs,” she added. “A small change of rate suddenly does not make this apartment to a million dollars achievable.”

Another problem contributing to the housing crisis is the lack of inventory at a lower cost. Salim Chraibi, founder and CEO of the Bluenest Development house construction company, said Fortune He sees pre-approved and motivated buyers in Miami, but there are simply not enough houses available in their price range. Chraibi’s company focuses on building houses for lower and medium -sized families.

“For the sellers, many cling to houses because they do not want to lose the lower interest rates they have locked years ago, which maintains the tight inventory and the cycle,” he said. “The biggest problem is the inventory of the types of houses considered affordable for intermediate income families.”

Treat with a sticker shock

With regard to the American market, the bottom of the scale does not necessarily solve the problem of the affordability of housing.

Even buyers who pay in cash must “face the sticker,” said Alexander Kalla, a real estate agent with Keller Williams Bay Area Estates in California, said Fortune.

The median price of houses in San Jose hovered constantly over 1.6 million dollars, he said, which has considerably stretched most households before mortgage costs are even taken into account. Thus, even if mortgage rates fell to 0%, a house at a median price in San Francisco, San Jose or anywhere else in the bay region would always require an extremely high deposit and monthly payments, he explained.

While “many buyers here are extremely sensitive to rates, which executes the figures for each change of the market,” said Kalla, “the main obstacle is that housing prices have massively exceeded local income since the increase in rates.”

The rents and prices of houses have increased more quickly than income in most regions of the United States, according to a report in 2024 of the US Treasury Department. Americans must now make more than six figures to afford a house at a median price, according to Realtor.com, but the American average salary is only slightly more than half.

“Until we attack prices, supply and growth of local wages, affordability will remain a challenge, whatever happens with rates,” said Kalla.