Middle-income households are bearing the brunt of the affordable housing crisis, according to analysis from the National Association of Realtors (NAR) and Realtor.com.
Buyers earning up to $75,000 a year can only afford 23% of current listings whereas five years ago, they could afford half of all available homes.
The report attributes the drop to high housing costs and underbuilding in middle price brackets, though the latter could improve, as May had the highest rate of single-family housing starts since April 2022.
To bring the supply of affordable housing in line with demand, the US needs to add at least two properties priced for middle-income buyers (up to $256,000) for every property listed over $680,000, according to the research. That would be a total of 320,000 new affordable homes.
“It’s not just about increasing supply,” says Nadia Evangelou, NAR senior economist and director of real estate research. “We must boost the number of homes at the price range that most people can afford to buy.”
Until more affordable inventory is built, or alternatively, housing prices come down or the median household income increases, many middle-income would-be buyers will continue to rent.
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Lower-income renters have less residual income than ever before – Harvard Joint Center for Housing Studies