Quote:Published November 11, 2025 4:06pm EST
The top 3 reasons housing has become so unaffordable in the US market – and it's not what you think
Rules and red tape are choking supply and driving up home prices across America

By Amanda Macias FOXBusiness

Brick by brick, regulation by regulation, America built its own housing crisis.

Experts say the problem is cemented into the foundation of the U.S. housing system, a design flaw decades in the making.

They point to three major forces doing the most damage: restrictive zoning, land-use barriers, and financial policies that have choked supply and pushed prices out of reach.

"There are just many, many ways to halt and stop development," said Joseph Gyourko, professor of real estate and finance at the Wharton School at the University of Pennsylvania.

"And we've gotten very, very good at it in the United States."


Experts say rules and red tape are choking supply and driving up home prices across America. (Matthew Busch/Bloomberg / Getty Images)

That resistance to new construction, experts say, is why restrictive zoning and regulatory barriers top the list of forces driving America’s housing crisis.

Jim Tobin, president and CEO of the National Association of Home Builders, said the cost of regulations alone plays a massive role in housing affordability.

"Regulatory burdens really do add up on the unaffordability index," Tobin told Fox News Digital. "We estimate that 24% of the cost of a single-family home is embedded in regulations at all three levels of local, state and federal government. That comes out to roughly $94,000 in regulatory costs."


The Trump administration has faced mounting pressure over the nation’s worsening housing affordability crisis. (Mario Tama / Getty Images)

He said some local governments intentionally restrict growth, adding both time and cost to the process.

"Sometimes there are communities that just regulate because they want to impede growth, they don’t want more homes built," he said.

And the longer builders wait, Tobin added, the more expensive those projects become.

"Time is money in real estate," he said. "You own the land, you’re paying taxes and, while you wait for local approvals, costs keep rising. Then many communities require developers to install sewer, water, roads and electrical infrastructure and all of that gets folded into the final price of the home."

A worker on the roof of a new home under construction in California.
Economists say increasing the housing supply is key to improving affordability. (David Paul Morris/Bloomberg / Getty Images)

Those mounting costs on builders, economists say, ultimately price out buyers and stifle new construction.

E.J. Antoni, chief economist at the Heritage Foundation, said the U.S. housing market won’t recover until building gets easier and borrowing costs come down.

"The best way to thaw this frozen housing market," he said, is to reduce government spending to relieve pressure on interest rates and roll back burdensome regulations.

He added that such steps "would in turn increase production of new homes."

Economists and builders warn that the greater danger lies not just in rising prices, but in what prolonged unaffordability could mean for the next generation of homebuyers.

"The more we delay ownership, the later we delay wealth creation in this country," Tobin said. "And that’s the challenge ahead of everybody right now."

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People overlook the hidden monthly mortgage payment for the right to have a triple net lease of your home from the bank and the state. You rent it and get all of the expense and risk associated with owning and maintaining it.

Property taxes.

Our last house before getting the hell out of the city permanently we paid what averaged out to over $650 a month just in property taxes. And that was back in 2018. I'm sure it's spiked way higher since then.

You wouldn't know it out here where I live. There are several new developments out here within 2-3 miles of my house. My home value has doubled in the 20 years I've been here. Farmers are finally giving in to the crazy prices they're getting for their land and the unprofitability of family farming these days. Many of these old family farms are now transforming into solar farms. I drive through a long-time farmland area to get to my hunting property. Giant tracts of land that once grew cotton or soybeans are now being filled with solar equipment. These tracts cover hundreds of acres. It's heartbreaking.