The U.S. Department of Housing and Urban Development generally defines “affordable housing” as “housing for which the occupant(s) is/are paying no more than 30% of his or her income for gross housing costs, including utilities.” Right now, in the United States, many people exceed this percentage to pay for adequate housing. For example, recent data shows that in 39 states and the District of Columbia, “more than 65% of households are unable to afford the median-priced new home.” But lower home prices alone do not always equate to affordability. In states with lower median incomes, a low median home price can still be unaffordable to large segments of the population. And in this current market, even small increases in home prices can push thousands of people out of the homebuying market. For example, in Texas, an increase of $1,000 would make new housing unaffordable for 14,365 additional potential buyers.
The Core Affordability Issue
A number of economic factors are driving this unaffordability conundrum, but at its core, it’s a supply issue. Even before COVID, the rate of new construction was less than half of what it was before the 2008 housing crash, while household formation was twice what it was at roughly the same time. That means it was half the historic rate of building new homes and double the rate of household formation. The housing market has struggled to right itself ever since.
This lack of inventory combined with high interest rates and stagnant household incomes have resulted in many people putting home buying on pause. Part of the solution is building new homes, but new construction is plagued with its own economic issues, including labor shortages, supply chain issues and the cost of raw materials. Not to mention, the reality that today we build homes essentially the same way that they were built more than two decades ago while so many other things have changed, including technology. But by leveraging more technology and the latest innovations, we have the potential to change more than just the construction process.
How Technology Can Offer Affordability Solutions
While technology will never be the sole answer to everything, it can influence the way we build homes, finance them and assess where they can be built and who qualifies to purchase them. It could be key to untangling this complicated affordability conundrum.
Technology has the power and potential to reinvent many aspects of the housing ecosystem, streamlining processes, gaining efficiencies, reducing costs and reinvigorating affordable housing markets. Here are a few ways:
Reducing costs: AI-enabled robotic technologies are already impacting building processes—like by streamlining repetitive construction tasks such as drywall installation. Full-sized 3D printers are being used to construct homes with concrete and other specialized materials that are more disaster-resilient, require less labor and have significant impact on insurability. Innovative modular construction reduces costs by moving construction to controlled environments, which eliminates weather delays, increases productivity and reduces time to market. Then, add in robotic technologies to modular construction and productivity could soar even more. Traditional builders can use AI to optimize raw material usage, which increases affordability by reducing costs and minimizing construction waste.
Streamlining the permitting process: Municipalities can implement AI to check building plans against zoning and land use guidelines. When plans don’t comply, AI models can recommend revisions that do meet existing land use requirements. AI can also be used to assess compliance with local building codes to ensure consistency with state policies and identify obsolete building regulations to remove roadblocks and delays to market. AI can gain efficiencies and save builders administrative and legal review dollars that won’t be passed on to homebuyers.
Increasing transparency: Other positive impacts technology can facilitate are transparent and efficient mortgage processes as well as dramatically improved loan administration. The mortgage process is one of the most complex parts of purchasing a home. Proptech companies are making shopping for mortgages easier by automating much of the tasks for borrowers, including application completion, preapprovals and even comparing rates by tailoring them to each buyer’s unique financial situation. Tech companies also are popping up that can help renters convert their rental payments into funds for down payments on home purchases. Technology can also accelerate the title process and close deals with more efficiency than ever before.
What’s more, blockchain technology is being used to reduce the cost of loan administration, which can be expensive. The blockchain automates the entire process from loan application to origination. Payments, due dates and servicing information are stored in the blockchain and connected to the borrower’s bank account so there are no missed payments. Even default servicing can happen without having to pay an external party.
Growing purchase options: Financial technology (fintech) companies are using technology to challenge the concept that credit is the only way to finance homeownership by creating shared equity financing models to make homes more accessible and affordable to buyers. The concept is simple: Instead of a traditional bank loan, borrows purchase a home with a fintech partner who gets an equity stake in the property in exchange for financing a portion of the down payment with no monthly debt repayment required. When the home is sold for a profit, those funds are shared with the equity partner.
Tech tools are also helping to facilitate co-buying. For example, Pairgap connects first-time home buyers with suitable investment partners to co-purchase properties. Pairgap streamlines the process and ensures legal protections, defines roles and financial responsibilities and exit strategies. It enables co-buyers who want to share homeownership costs and helps users make smart shared investments.
Leveraging predictive analytics: Another significant way technology can positively impact home access and affordability is by improving risk prediction in borrowing and lending. Because traditional risk prediction models are imperfect, many people are excluded based on credit risk—with moderate income and borrowers of color disproportionately impacted. AI and the blockchain can be used to more accurately predict risk by analyzing far more data to create more detailed and precise predictive risk models. Current risk models rely heavily on credit scores, which are based on only a few categories of payment—think mortgages, credit cards and other consumer loans. AI and the blockchain enable networks of payment information that capture more data, such as recurring payments like cell phone bills, streaming service subscriptions and utilities. These payments can be more accurate predictors of a borrower’s future ability and willingness to repay mortgage loans. It can widen the pool of qualified buyers, which is better for a healthy housing ecosystem.
First-time home buyers are particularly impacted by affordability challenges. During the past five years, home prices have risen by approximately 54% while typical wages have increased by only 29%, according to ATTOM Data Solution’s fourth quarter 2025 housing affordability report. Fintech developers have stepped in to offer creative solutions to support first-time homeownership. One example is Neobanc, a payment app that offers cash back rewards for everyday expenses—rent, utilities, tuition, insurance and more—which helps users save more in less time. Other tech solutions like Foyer help first-time home buyers supercharge their ability to save for a down payment with high-yield savings accounts supported by tools users can employ to track money, set and manage timelines and overall financial goals, understand closing costs in their state and estimate mortgage payments. Foyer even offers deposit matching similar to 401(k) models.
Turning Challenges Into Opportunities
Though the housing market has been fraught with challenges for some time, innovative technology solutions are growing. They’re not only transformative but also reinventing and reinvigorating the entire housing ecosystem.
Housing affordability is a complex knot of challenges that requires multiple solutions. Fortunately, right now, there are many technologies that already exist and can be implemented and new ones continually surfacing. This is where real estate professionals who are watching and learning can also find opportunities—for their businesses and practical solutions for their customers now and in the future.
For more insights on tech that’s tackling housing affordability right now, join NAR Tech & Innovation on April 16 for a free webinar featuring Landy Liu, founder, Foyer Kyle Collier, cofounder & CEO, Neobanc, and Nikki Merkerson, CEO, Pairgap.
Author
Sharon Love-Bates is Director, Emerging Technology within the Strategic Business, Innovation & Technology group at the National Association of REALTORS®.
References
BuildSteel; “Startups Develop Solutions For Affordable Housing, Veev Tops the List.”
Collins, N.; “Collins: How Technology Can Help With Housing Affordability,” San Jose Spotlight, 27 November 2025.
National Association of Home Builders; “New Data Show Housing Affordability Concerns Across the U.S.,” 24 February 2026.
National Governors Association; “Governors Take the Lead on Affordability,” 26 February 2026.
National Mortgage Professional; “Home Prices Continue to Outpace Wages, Keeping Affordability Under Pressure,” 11 January 2026.
US Department of Housing and Development; “Affordable Housing,” Glossary Resources.
Williams, S.; S. Pardo; “our Ways Technology Is Addressing the Housing Affordability Crisis,” Urban Institute, 14 November 2019.
