Home prices have hurt buying more than interest rates, Harvard says
High home prices have affected affordability and raised the costs of homeownership more than interest rates, according to a new study from Harvard.
A report from the Harvard University Joint Center for Housing Studies found that homebuying is at a 30-year low in markets around the country, even as interest rates are lower than they were for the majority of 2024.
The Harvard report found that current mortgage payments are more than double the average from 2020, regardless of interest rates. Average monthly mortgage payments for a typical first-time homebuyer rose from roughly $1,200 five years ago to over $2,500 in mid-2025.
The report calculated that the annual income needed to afford a home nearly doubled as well, from $68,350 in 2020 to $130,678 today.
"Most strikingly, it would take reducing interest rates to nearly zero to bring the monthly mortgage payment on the median-priced home back to its 2020 level," author Daniel McCue said in the report. "But even then, total monthly costs would still be higher than in 2020 due to rising property taxes and insurance premiums."
Freddie Mac reports third-quarter earnings
Mortgage giant Freddie Mac said Thursday that its profit dipped to $2.8 billion during the third quarter, down 11% from the period one year prior.
The quasi-government entity also reported that its net worth grew to nearly $68 billion in the quarter, up from $56 billion in the third quarter of 2024.
Freddie Mac and its sibling institution, Fannie Mae, buy mortgages from banks and other lenders, then bundle those loans into mortgage-backed securities that can be sold to investors. Freddie Mac officials said the agency's support led to homebuying for 483,000 households during the quarter — including 288,000 for low- to moderate-income families and another 195,000 for properties that are now rental units.
Bill Pulte, chairman of Freddie Mac's governing board, said in a statement Thursday that 106,000 loans went to first-time homebuyers in the third quarter because of the mortgage finance giant's support.
"But we are not resting on these results," he said in the statement. "The country needs more supply, and we are looking closely at ways to help drive more homebuilding in both the multifamily and single-family markets."
Freddie Mac and Fannie Mae have been under the conservatorship of the Federal Housing Finance Agency since the Great Recession. Pulte and President Donald Trump have made it clear that they want to free both agencies from conservatorship.
Urban Institute tool compares cost of living by state
Americans can see how much it costs to live in every U.S. state using a new data tool from the Urban Institute, a Washington, D.C. think tank.
The American Affordability Tracker is an interactive map of the United States that shows the average cost of everyday household expenses — including a gallon of gas, groceries, health insurance, and childcare. The data tool also shares the average home sale price and mortgage delinquency rate. The Urban Institute sources data from the Federal Housing Finance Agency House Price Index and ICE Mortgage Technology for its housing numbers.
Signe-Mary McKernan, vice president of the institute's family and financial well-being division, said in a statement that policymakers need data on the nation's affordability crisis to help craft laws that help American households. The affordability tracker can help in that effort, she added.
"With this knowledge, decision makers at all levels of government can better target policy solutions in their communities that make life more affordable," McKernan said in the statement.
General Motors slashes 1,750 jobs as electric vehicle demand dips
Michigan automaker GM said this week that it will lay off 1,200 workers at an electric vehicle factory near Detroit, along with 550 workers at a battery-making facility in northeastern Ohio.
The layoffs come as GM reported Americans have decreased their appetite for purchasing electric vehicles. Factory Zero — in Hamtramck, Michigan — is where workers build GM's Hummer EV, Silverado EV, and Sierra EV. Ultium Cells — the battery facility in Warren, Ohio — opened in August 2022, according to the company.
GM officials noted that the $7,500 federal tax credit that auto buyers once received for purchasing an EV expired in September, and that likely played a role in falling demand.
"Following recent U.S. government policy changes, including the termination of certain consumer tax incentives for EV purchases and the reduction in the stringency of emissions regulations, we expect the adoption rate of EVs to slow," GM said in a regulatory filing earlier this month.
GM has been in a years-long race with other automakers, hoping to assert dominance in the emerging electric vehicle market. Tesla and overseas automakers, such as Nissan and Toyota, are competing with GM for the nation's pool of potential customers.