NAR: US Housing Market Needs More Than 300,000 Affordable Homes for Middle-Income Buyers
According to a new report from the National Association of Realtors and Realtor.com, the United States housing market is short more than 300,000 affordable houses for middle-income buyers.
The country’s ongoing housing inventory shortage affects middle-income purchasers more than any other income group.
The National Association of Realtors and Realtor.com’s housing affordability and supply analysis compares the number of listings missing per price range in the current market to a balanced market.
A balanced market exists when 50% of all available homes are priced within the range of middle-income purchasers.
“Middle-income buyers face the largest shortage of homes among all income groups, making it even harder for them to build wealth through homeownership,” Nadia Evangelou, senior economist and director of real estate research at the NAR, stated.
“A two-fold approach is needed to help with both low affordability and limited housing supply. It’s not just about increasing supply. We must boost the number of homes at the price range that most people can afford to buy.”
At the end of April 2023, approximately 1.1 million residences were available for sale, a 5 percentage point increase from the previous year.
Yet, the market is missing about 320,000 property listings priced up to $256,000, the acceptable price range for middle-income purchasers or households earning up to $75,000.
Only around a quarter (23%) of current offerings are affordable to middle-income purchasers. Five years ago, this income bracket could afford to buy half of all available homes.
“Ongoing high housing costs and the scarcity of available homes continues to present budget challenges for many prospective buyers, and it’s likely keeping some buyers in the rental market or on the sidelines and delaying their purchase until conditions improve,” Realtor.com Chief Economist Danielle Hale said.
“Those who are able to overcome affordability constraints may be increasingly drawn to newly constructed homes or to the suburbs and beyond, both of which may offer buyers more realistic opportunities for homeownership in the near term.”
El Paso, Texas; Boise, Idaho; and Spokane, Washington have the fewest affordable homes available for middle-income purchasers among the 100 largest metro areas.
Youngstown, Akron, and Toledo have the most affordable homes available for their income bracket.
“Even with the current level of listings, the housing affordability and shortage issues wouldn’t be so severe if there were enough homes for all price ranges,” Evangelou continued.
“Our country needs to add at least two affordable homes for middle-income buyers for every home listed for upper-income buyers.”
