The average price of a single-family home has risen nearly 38% since President Joe Biden took office, according to the S&P Case-Shiller home price index. The sudden spike, along with rising interest rates, has acted as a giant emergency brake on homebuying, leaving many families stranded in places they did not expect to be long-term. It also drove a giant wedge between those who own a home and those who do not. But not all is hopeless.
First, the data. The Case-Shiller index for home prices rose 38% between January 2021 and June 2024. For comparison, the index rose 44% over a comparable, three-and-a-half-year period (January 2003 to June 2006) during the mid-2000s housing bubble. Interest rates have risen over the same period, with the average rate for a 30-year, fixed-rate mortgage rising by 127%, from 2.79% on January 14, 2021 to 6.35% on September 5, 2024 (after peaking at nearly 8% in November 2023).
These facts combine to make purchasing a new house costlier — and in many cases cost prohibitive — particularly for first-time homebuyers. According to data compiled by Harvard University’s Joint Center for Housing Studies, “For the low-downpayment loans commonly pursued by first-time buyers, the total monthly payment on the median-priced home is now $3,096 after taxes and insurance” (compared to a median monthly payment of slightly over $2,000 in January 2021). To afford the current monthly payment for a median-priced home “under common payment-to-income ratios” (with the payment equal to 31% of income), a family would need an annual household income of $119,800. The Harvard report adds that only one in seven American families who do not own a home can meet that threshold.
It may seem counterintuitive at first, but this dramatic increase in the cost of buying a new home does not translate into rising costs for all housing. For instance, families who already own a home are locked into a mortgage with a pre-determined principal and interest rate, which is not affected by these rising costs. However, these rising costs do affect their ability to move by making it more expensive to sell their house and buy a different one.
Rising home costs will also affect rental costs. Because it is more expensive to buy a home, some people who would have purchased a home will choose to rent instead. As a result, the demand for home rentals will be higher than it otherwise would be. And, when rental home demand increases, basic supply-and-demand stipulates that the price of rental homes will increase too. Thus, the rising costs of homes affects non-homeowners in two ways. Not only are many people priced out of buying their first home, but they will also see their rental costs rise as well.
These rising costs affect homeowners and non-homeowners in slightly different ways. People who already own a home benefit in the sense that their property value is increasing, although they lose flexibility if they have to move. Families may choose not to pursue a job opportunity in another city, for example, or have more children, due to the extra costs related to moving. Meanwhile, people who do not own a home suffer from rising costs whether they buy a home or not. Additionally, they also miss out on the opportunity for independence and wealth accumulation provided by home ownership. In a way, the rising costs of purchasing a home drives a further wedge between homeowners and renters.
In an indirect way, the current record-high home prices may be on the November ballot, but for now, families must take them as a life circumstance beyond their control. The sovereign Lord of the universe does not judge us based on what we cannot control, but based on how we respond to the trials he does control. So, in this far-from-ideal situation, how should Christians respond?
Non-homeowners can respond by pursuing godly community. As renters, they have more freedom to move, and they should use that freedom to locate themselves among God’s people. Those who are not married can join houses of likeminded men or women, where they can cultivate habits of daily discipleship, fellowship, and prayer, which God blessed in Acts 2:42-47. Those who are married, or who have children can choose to locate themselves close to a church community so that they can be an integral part of the church’s life — serving and fellowship at every opportunity.
Homeowners can respond by investing in their local church, especially through hospitality. Perhaps the economic conditions that prevent them from moving are God’s way of nudging them to go deeper in their current church community, building the deep discipling relationships (Matthew 28:19) that only come with time.
Christian homeowners should also use the homes God has given them to bless his people through showing hospitality, as the New Testament commands (Romans 12:13, Hebrews 13:2, 1 Peter 4:9). Perhaps they can house a visiting missionary or refugee. Perhaps they can invite another family over for a weeknight dinner or a Sunday afternoon meal. Perhaps they can host a Bible study.
Instead of viewing these activities as hassles or burdens, they should recognize that they are making investments in the kingdom of God and particularly in the souls with whom they share their own local church. Jesus concluded his parable of the dishonest manager, “Make friends for yourselves by means of unrighteous wealth, so that when it fails they may receive you into the eternal dwellings” (Luke 11:9).
Jesus continued, “One who is faithful in a very little is also faithful in much, and one who is dishonest in a very little is also dishonest in much” (Luke 11:10). So, whether you have much or little, whether you live in a paid-off mansion or have been frustrated in your first home purchase by the poor economy, use whatever you have to “seek first the kingdom of God and his righteousness, and all these things will be added to you” (Matthew 6:33).
Joshua Arnold is a senior writer at The Washington Stand.
