Among those hardest hit are seniors on fixed incomes and people with disabilities. For those who can afford it, Stevenson advises that now could be the time to act. With demand cooled, prices could climb again as soon as rates fall.  

"If you could afford to buy now, then you can refinance in three or four years' time, and reduce those monthly costs, and I think, sort of be in a better position," he said. 

For many families, however, the American dream of homeownership is shrinking. According to the National Association of Realtors, only about 20% can now afford a median-priced home – a multi-decade low. Without policy shifts or a market correction, experts warn that the dream will continue to slip further out of reach.