Over 300,000 Affordable Homes Needed For Middle-Income Buyers In US Housing Market (NAR)

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Over 300,000 Affordable Homes Needed For Middle-Income Buyers In US Housing Market (NAR)

Jun 16, 2023 | News | 0 comments

A recent analysis conducted by the National Association of Realtors® and Realtor.com® reveals that the United States housing market lacks over 300,000 homes that are affordable for middle-income buyers. This ongoing shortage of housing inventory primarily affects middle-income buyers, surpassing its impact on other income brackets.

The housing affordability and supply report by NAR and Realtor.com® analyzes the disparity between the current market listings and a balanced market in terms of price range. A balanced market is determined by the presence of an equal number of homes within the price range that is considered affordable for middle-income buyers.

Nadia Evangelou, NAR’s Senior Economist and Director of Real Estate Research, emphasized the significant challenge middle-income buyers encounter in finding homes, exacerbating the difficulty of building wealth through homeownership. She emphasized the necessity for a dual strategy to address both the issue of affordability and the scarcity of housing supply. Simply increasing the housing inventory is insufficient; it is crucial to augment the number of homes available within a price range that aligns with the purchasing power of the majority.

As of April 2023, the housing market displayed a slight improvement with approximately 1.1 million homes listed for sale, reflecting a 5% increase compared to the previous year. Nevertheless, there remains a significant shortage of nearly 320,000 home listings valued within the affordable price range of up to $256,000 for middle-income buyers or households earning up to $75,000. Middle-income buyers now have the financial capacity to purchase only 23% of the listings in the current market, a notable decline from five years ago when they could afford to buy half of all available homes.

El Paso, Texas; Boise, Idaho; and Spokane, Washington, rank as the metropolitan areas with the lowest availability of affordable homes for middle-income buyers among the top 100 metro areas. On the other hand, Youngstown, Akron, and Toledo in Ohio stand out as the cities with the highest number of affordable homes for this income group.

Nadia Evangelou further reiterated that addressing the housing affordability and shortage challenges could have been alleviated if there had been a sufficient inventory of homes spanning various price ranges. She emphasized the need for the country to add a minimum of two affordable homes for middle-income buyers for every home listed for upper-income buyers.