Wages are up 4.1% year over year, while asking rents are up 2.6% and mortgage-payment growth has slowed to roughly 0% amid declining mortgage rates and a slowdown in home prices.
Wages are up 4.1% year over year, outpacing gains in asking rents and mortgage payments, which are up a respective 2.6% and 0.2%. That’s a reversal from the pandemic moving frenzy, when growth in housing costs—particularly mortgage payments—far outpaced growth in wages.
Please note that asking rent data and wage data cover rolling three-month periods, the most recent of which is the three months ending August 2025. Mortgage payment data cover monthly periods, the most recent of which is July 2025.
Wages have been rising faster than mortgage payments since February 2025, and have been rising faster than rents since September 2022.
“It’s encouraging that wages are growing faster than housing costs because it gives homebuyers and renters a bit more breathing room,” said Chen Zhao, Redfin’s head of economic research. “But today’s relief doesn’t erase yesterday’s struggles. Years of rapid home price growth during and after the pandemic pushed homeownership out of reach for many American families, and we’re still working to close the gap.”
The latest with homebuying costs: Mortgage rates have been steadily declining since May, and yesterday fell to 6.25%—the lowest level in roughly a year. The drop in rates has helped homebuyers gain thousands of dollars in purchasing power. The median monthly mortgage payment was $3,192 as of July, down from $3,239 just a month earlier. Still, mortgage rates are more than double the record low hit during the pandemic, and home prices continue to climb—albeit at a fraction of their pandemic pace.
The latest with rental costs: Asking rents are picking back up after roughly two years of declines. The median asking rent rose 2.6% year over year in August to $1,790—the largest increase since December 2022. Rents are rising because demand is strong—in part due to high homebuying costs—and supply is cooling. Supply is cooling because apartment construction dramatically slowed over the past year. While rents continue to grow at a slower pace than wages, the gap appears to be narrowing.
Methodology
Mortgage payment data incorporates the median home sale price and average 30-year fixed mortgage rate, and assumes a 15% down payment, a fixed insurance estimate of 0.5% of the median sale price, a private mortgage insurance estimate of 0.3% of the median sale price, and a 1.25% property-tax rate.
Mortgage payment data is based on an analysis of MLS data and mortgage rates from Freddie Mac. Wage data come from the Federal Reserve Bank of Atlanta via Fred. Asking-rent data come from rental listings on Redfin.com.
