Housing Crisis and High Interest Rate Era (2022–2025)

As a result of the economic recovery following the COVID-19 pandemic, the U.S. faced a sharp increase in inflation. To curtail this, the Federal Reserve increased interest rates 11 times between March 2022 and July 2023 which amounted to federal fund rates spiking from historically low levels of 0.25% to 5.5%, which indirectly pushed mortgage rates. This rise had a greater impact on households with lower education levels, who depend on mortgages more heavily as a source of wealth than households with greater education levels that have more diversified assets composed of stocks, bonds, real estate, and commodities. The following line chart of Average Affordability Ratio (Real Estate Value in $ / Net Worth in $) by Education Levels highlights that individuals with no high school education or only high school education had their net worth tied up with real estate to a greater level than individuals with college education. Following the patterns observed in other visualizations of wealth, economic resiliency is strongest among the following groups: college graduates, those with some college, high school graduates, and those with less than a high school education. Starting from deep into the COVID-19 pandemic in 2022 and until 2024, college educated individuals saw a steady decrease in the real estate affordability due to increases in net worth while the other groups saw a steady decline. After 2024 and until Q2 of 2025, all groups saw a decrease in the metric. This surge in interest rates impacted the real estate affordability ratio of the groups disproportionately, as the groups with less education had a stagnant real estate affordability ratio in Q2 2025 compared to 2024, while the college educated groups saw a net decrease during the time period.

The increase in housing costs coincided with the affordability crisis. The Mortgage Burden Surge by Education visualization emphasizes that the average mortgage for college-educated individuals increased sharply between 2022 and Q2 2025 while it has been stagnant and lower for the other groups. This disparity reflects the increase in home prices as well as inequitable access to high-value mortgages, typically reserved for high-value properties and requiring higher down payments, credit scores, and cash reserves, which are characteristics of wealth. The stagnant average home mortgage of the groups with less education represents not only a wealth gap but unequal access to wealth accumulation which perpetuates existing inequalities. Consequently, individuals with lower educational attainment faced barriers in entering the housing market or invested in lower-value properties, illustrating how education levels correlate with wealth inequality in real estate.

As evident in the two graphs, the combined effect of rising mortgages and stagnant real estate ownership among those without a college education widened the wealth gap from 2022 to 2025. The Net Worth Gap by Education line chart displays that as of Q2 2025, college-educated individuals had attained a considerably higher net worth compared to those without a college education, with appreciation in real estate playing a significant role. The average net worth in 2025 for those with college education, some college, high school education, and less than high school education were as follows:  $61.4M, $11.8M, $7.5M, and $1.1M.  This visualization elucidates that the recent housing affordability crisis and surge in mortgage costs are not occurring in isolation but are connected to structural inequalities in the building of wealth across education levels.