Fix the first rung and the housing ladder will work again 

Thinking big about residential real estate success requires a big-picture perspective. Industry Decoded features industry experts who can enrich your understanding of issues affecting the industry as a whole.

The views expressed in this column are solely those of the author.

A coalition of partners has recently announced the Let America Build campaign, the goal of which is to promote home building, reconstruction and availability of affordable housing inventory. T3 Sixty supports this campaign, as our research of the last decade has consistently shown that affordability of housing has and continues to be a significant issue affecting the North American consumer.

My personal story

My wife and I bought our first home in 2003, with a 6.25% interest rate, for $125,000. It was a classic starter home: a 1,700 square foot, 3 bedroom, 2 bath place in a 1970s-built suburb north of Route 183 in Austin. 

We were among the first of our friend and peer group to purchase a home. We were able to use a down payment at 10%, which came from our savings. Our monthly payment for the mortgage itself was about $700, and with taxes and insurance it was affordable. Inflation adjusted for today's dollar, the mortgage would be about $1,300.  

The same home today, inflation adjusted, should be $228,900. Zillow reports a Zestimate of $418,500, which translates to a mortgage payment of approximately $2,300 — almost double what an inflation-adjusted mortgage payment would have been in 2003. 

Our story is of course an anecdote, but it is one that is echoed in the housing market more broadly. Due to a combination of factors, the first step on the housing ladder is now a lot higher than it used to be.

Why ownership matters

Part of what has kept me interested in the real estate industry is a fundamental belief about the American republic and the American dream. Real estate ownership, at least in this country, is the foundation of wealth building. 

In our upcoming Trends Report, we studied homeownership in the chapter "The 40-Year-Old First-Time Homebuyer" and explored some of the forces that have made homeownership difficult or impossible for many. Note that my homeownership journey started at 29; to now start at 40 is quite a gap!

In the U.S., the typical homeowner has a median net worth of $458,900, compared with $10,600 for a renter — a difference of $448,300, or about 43 times as much wealth, according to the Federal Reserve's 2025 Survey of Consumer Finances. The benefits of the forced savings and accumulation of gains from property appreciation are clear and a public good. 

As a country, we face a lot of challenges to make housing more affordable. Some of these challenges are of our own making and under our control. In our upcoming Trends chapter, "Navigating the Housing Market Deep Freeze," some of these factors come to light.

There are simply fewer starter homes, and the ones we do have are more expensive. We have made it hard to build new housing affordably in the U.S.; regulations and red tape now add $131,734 to the cost of a new home. 

Because of this, there are fewer homes in the starter-home price category. In 2019, the category made up 55.6% of homes for sale. Today, the share is just 38%, and the typical price has climbed from $256,000 to $344,000.

This isn't tenable for the American consumer, and there is action to be taken. The 21st Century Road to Housing Act is a good start, but more action is required to complete the proposals described in the legislation and to address the changes that are needed at the state and local level. 

Other industries facing the challenge

Usually when the economy sours, people stop buying new vehicles and homes. 

One example of how the automobile industry is addressing affordability is with low-cost consumer-grade electric vehicles. The latest entrant: the Slate truck. This is a no-frills, light truck, designed to be something that an owner could work on themselves, with the ability to be modified and upgraded, and to provide a solid live/work truck for about $25,000. I can see a lot of these hitting the road in the next couple of years, as reliable, electric transportation reduces the gas and maintenance costs at a time when it will be most valued.

Perhaps there is the equivalent of a Slate for real estate? With regulatory costs for new homes at $130k+, it seems challenging to innovate — and that is why movements like Let America Build are important.

You can make a difference

Real estate professionals work with clients every day who struggle to afford their first home. This is why getting involved now is important. We have a midterm election coming up, and another national election in two years. The 21st Century Road to Housing Act was a good start, but more action and pressure on representatives and governmental bodies is needed to create opportunities for innovation and affordability in housing.

Helping people up the first rung of the ladder isn't just a charitable act. A first-time buyer becomes your next listing and your move-up buyer. Getting people on the road to wealth building through real estate isn't just a noble thing to do, it's good business. 

Find out more at letamericabuild.org, and join the other real estate leaders and professionals that agree it is time to address this challenge head on!

Jack Miller has held leadership roles in the real estate industry for over two decades and is currently CEO and president of T3 Sixty, one of real estate's leading management consultancies. (Note: Real Estate News is an editorially independent division of T3 Sixty.) Jack also contributes to the Swanepoel Trends Report, writing about brokerage industry trends, technology in real estate and emerging business models.