America’s housing market is paralyzed, with buyers pulling back and builders growing more pessimistic ahead of the midterms.

Adding to the strain: Mortgage rates have surged back above 7% in recent weeks, hitting a three-year high of 7.4% last month. The average 30-year fixed rate eased slightly to 7.24% last week, according to Freddie Mac.

America’s housing woes run deep. Homebuilding hasn’t kept pace with demand since the 2008 financial crash decimated the country’s housing industry. Elevated mortgage rates have also pushed up monthly payments for buyers, all while home prices keep climbing each month to record-high levels.

As of the third quarter, the average household must earn $115,600 in income to afford the typical cost of housing – that’s 75% higher than the $66,200 required five years ago, according to Oxford Economics.

That has translated to the number of homes trading hands to hover near 30-year lows for the past three years.

President Donald Trump won the 2024 election amid growing frustration over the cost of living. Two years later, affordability remains a defining issue heading into the midterm elections, as Americans continue to grapple with high prices for housing, groceries, gasoline and other everyday essentials.

But while the White House has taken some steps aimed at housing affordability during Trump’s second term, largely through executive orders, the issue has featured relatively little in the administration’s public messaging over the last two years.

Trump, who was a real estate developer for decades, said on the 2024 campaign trail that his plan for tackling the cost of housing would primarily rely on lowering interest rates. He doubled down on that promise this year.

“People that own their homes, we’re going to keep them wealthy. We’re going to keep those prices up. We’re not going to destroy the value of their homes,” Trump said at a cabinet meeting at the start of this year. “We’re going to make it easier to buy. We’re going to get interest rates down.”For a brief moment, mortgage rates appeared poised to fall. In January, Trump directed Fannie Mae and Freddie Mac, the government-sponsored enterprises that underpin much of the US mortgage market, to buy $200 billion in mortgage-backed securities in an effort to push rates lower.

Rates dropped earlier in the year, dipping below 6% in February for the first time since 2022, when the Federal Reserve began its fight against post-pandemic inflation, raising hopes that cheaper borrowing would ease the housing affordability crunch.

But the reprieve was short-lived. Mortgage rates climbed once again after the US began its war with Iran, and have remained elevated since.

Mortgage rates are tied to the 10-year Treasury yield, which moves with investors’ expectations for inflation, economic growth and the Fed’s interest rate policy. In recent months, the bond market has been hit by renewed inflation fears, an oil-price shock linked to the Iran conflict, rising federal deficits and a surge in AI investment. And early signs point to the bond market turmoil adding to the housing market’s woes.

Pending home sales fell to a record low in September, in data going back to 2001, according to the National Association of Realtors. New home construction also dropped to a four-month low, Census Bureau data showed, as elevated borrowing costs continue to weigh on the market.

The gloom is spreading to builders, too: Homebuilder sentiment, a measure of how confident the industry feels about the housing market, sank to a 14-year low in September, according to the latest survey from the National Association of Home Builders. Overall, the housing market’s issues are going to take a long time to solve.

But some bright spots remain: Rents have stabilized nationally over the last few years, said Yonah Freemark, a principal research associate in the Housing and Communities Division at the Urban Institute. That’s partly due to increased multifamily apartment construction between 2020 and 2024, which helped relieve demand pressures, he added.

Overall, the federal government may not have much power to affect the housing market’s supply, because zoning and permitting decisions are made by local and state governments, said Daryl Fairweather, Redfin’s chief economist.

“In places that have been builder-friendly and have allowed supply to meet demand, we have seen prices come down and affordability improve,” Fairweather said, pointing to Austin, Texas, as an example, which has seen home prices fall from their peak in 2022. The city expanded its housing stock by roughly 30% between 2015 and 2024, according to Pew. Last month, Trump signed an executive order that directs federal agencies to ease the burden of mortgage insurance and refinance costs, among other measures.

“President Trump has been laser-focused on making housing more affordable,” said Davis Ingle, a White House spokesperson.

“The President will not stop fighting until the American Dream of homeownership is within reach for every American, which is why he continues to sign bold new executive orders and calls on Congress to pass further legislation.”But the White House’s tariff regime has added to the cost of building housing, according to the NAHB – and deportations have slowed home-building projects in many areas that rely on an immigrant construction workforce.

Some White House proposals to improve housing affordability never materialized, such as a 50-year mortgage or the ability to make mortgages portable, which would allow homeowners with lower rates to take their existing loan to a new property when they move. Most housing initiatives were also handled by executive order, rather than through legislation.

The one exception was the ROAD to Housing Act, which Congress passed with broad bipartisan support this summer. The bill included measures to increase the supply of housing and a provision to limit large investor purchases of single-family homes, which codified into law one of Trump’s executive orders.

However, Trump allowed the measure to become law without his signature, rather thang it or vetoing it. At the time, Trump called the housing bill “a big yawn” and “of minor importance.”