AUSTIN, TX — The dream of homeownership is slipping further out of reach for many Americans, as a new Realtor.com® Affordability Report highlights the dire state of housing affordability across the nation. The report reveals that the typical U.S. household would need to allocate 44.6% of its income to afford a median-priced home, far exceeding the recommended threshold of 30%.
Danielle Hale, Chief Economist at Realtor.com®, underscored the mounting challenge. “Earnings have risen, but homebuying costs have risen faster, which means that adhering to affordability guidelines can feel challenging if not impossible in many housing markets across the country,” Hale said.
Midwest Offers Rare Affordability
Among the nation’s 50 largest housing markets, only three metros remain affordable for median-income earners under these guidelines: Pittsburgh, Detroit, and St. Louis. These cities stand out for their relatively low home prices, preserving rare opportunities for homeownership without excessive financial strain.
“Detroit has always stood out for its affordability, and even with home prices rising, it remains one of the last major markets where median-income buyers still have a real shot at homeownership,” noted Anthony Djon, founder of Anthony Djon Luxury Real Estate. However, he warned that competition is intensifying for lower-priced homes, narrowing opportunities for first-time buyers.
Coastal Markets Deeply Unaffordable
On the opposite end of the spectrum, coastal cities like Los Angeles, San Diego, and Boston remain out of reach for most homebuyers. The report highlights that the typical household in Los Angeles would need to spend over 104% of their income to afford a median-priced home. Not surprisingly, this drastic imbalance has resulted in a homeownership rate of just 49% in Los Angeles, compared to the national average of 65.1%.
Path Forward for Housing Affordability
The affordability crisis continues to be driven by elevated mortgage rates, now averaging 6.82%, and persistently high home prices. While raising incomes or lowering housing costs could help, the report stresses that expanding the supply of affordable housing is a more sustainable solution.
“Home prices have eased in many markets with significant new construction over the last five years,” the report states. Increasing affordable home construction may help ease pressure in high-demand markets and provide a pathway to homeownership for the nation’s struggling buyers.
The housing affordability gap highlights the need for systemic changes to ensure equitable access to homeownership, a key component of the American Dream.
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