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Housing

Middle-Income Households Struggle to Afford Homes Despite Improved Housing Supply

Strategic Insights

— 1 min read

As the post-pandemic real estate market continues to rebound, a new report from the National Association of Realtors and Realtor.com highlights the growing challenge facing middle-income households in finding affordable homes. Despite recent gains in housing supply, these earners, who make up the largest share of the nation's households, can only afford 21.2% of available listings, a significant drop from the 49% they could afford in 2019. This crisis is exacerbated by the need for 416,000 more listings priced at or below $255,000, the affordability ceiling for typical middle-income earners such as teachers, nurses, and other skilled workers.

Key Takeaways:

  • Middle-income households, who make up the largest share of the nation's households, can only afford 21.2% of available listings, a decline from 49% in 2019.
  • The report defines "middle-income" households as those earning $75,000 annually and shows that this demographic faces the largest housing shortage among all groups.
  • Households making $100,000 a year have also experienced a significant shortfall in affordable listings since 2019.
  • Lower-income households, representing a third of all U.S. households, "have almost no access to for-sale homes."
  • Building a home for under $260,000 is increasingly difficult due to rising land costs, zoning rules, and material prices.

Statistics:

  • 21.2% of available listings can be afforded by middle-income households.
  • Middle-income households saw a significant drop in affordable listings from 49% in 2019 to 21.2% in the current market.
  • 416,000 additional listings priced at or below $255,000 are needed to meet the affordability requirements of typical middle-income earners.
  • Lower-income households make up a third of all U.S. households.

Sources:

  • [1] National Association of Realtors and Realtor.com, "Report Reveals Middle-Income Households Struggling to Afford Homes"
  • [2] The New York Times, "A Housing Crisis for the Middle Class, Not Just the Poor"

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