Housing affordability: Over 75% of homes too expensive for middle class

The US housing market is so unaffordable, over 75% of homes on the market are too expensive for middle class buyers, according toThat's largely due to the shortage of housing supply, which has hit middle income buyers the hardest. Thanks to elevated mortgage rates, the housing market is missing around 320,000 homes priced at or below $256,000 – the maximum price a middle-income buyer earning up to $75,000 can afford.

Of the 1.1 million listings on the market in April, middle-income buyers could only afford 23% of them, the report said. That's less than half of what the group could afford five years ago, when around 50% of all listings on the market were considered affordable for that group. The three metropolitan areas with the largest inventory of affordable homes are currently located in Ohio, the report added. Meanwhile, El Paso, Texas; Boise, Idaho; and Spokane, Washington have the fewest number of listing considered affordable.

"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," NAR senior economist Nadia Evangelou said in a statement."Our country needs to add at least two affordable homes for middle-income buyers for every home listed for upper-income buyers."

The US housing market has slowed in 2023, with high mortgage rates sidelining both buyers and sellers. Existing homeowners are discouraged from listing their properties for sale, as many of their properties were financed in the last decade of ultra-low interest rates.

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