Economists' Outlook

Housing stats and analysis from NAR's research experts.

Housing Affordability in June 2018

The NAR Research Group and REALTOR.COM have partnered to conduct an analysis of affordability at different income levels for all active inventory on the market.  The result of this analysis, the REALTORS® Affordability Distribution Curve and Score, shows that housing affordability across the United States declined in June compared to a year earlier. The main reason for the decline is that housing inventory remains very low, causing affordability to weaken in most areas of the country.

Nationwide, it is estimated that a household needs to earn at least $75,000 to afford more than half of the active housing inventory. Currently, the typical household, earning $51,500 can afford to buy 36 percent of homes for sale.

In June 2018, the Realtors® Affordability Score for the U.S. was 0.80. A score less than 1.0 means that households in many income ranges can afford a smaller share of houses on the market than their income percentile. For instance, under ideal housing conditions, households that earn $35,000-$50,000 should be able to afford 42 percent of homes that are currently for sale. However, they can afford to buy only 31 percent of homes currently on the market.

Metropolitan Area Affordability

Since all real estate is local, the REALTORS® Affordability Distribution Curve and Score identifies the metro areas with the most/least affordability challenges and tracks areas where affordability is weakening or improving.

Among the 100 largest metro areas, Los Angeles-Long Beach et al., CA was the least affordable metro area in June followed by San Diego-Carlsbad, CA and San Jose-Sunnyvale et al., CA. In these metro areas, a typical household can barely afford to buy 5 percent of homes currently listed for sale. In contrast, the same household can afford to buy more than 70 percent of the housing inventory in Youngstown-Warren et al., OH-PA.

Compared to a year earlier, 72 out of the nation’s 100 largest metros became less affordable, whereas 13 were unchanged and 15 became more affordable. While smaller cities are starting to face affordability challenges, Boise City, ID and Spokane-Spokane Valley, WA experienced the highest largest decline in housing affordability in June. For instance, in Boise City, ID, the score decreased to 0.62 from 0.76 a year earlier. Let’s see what this means for households. A household earning $100,000 could afford to buy 64 percent of homes for sale in June,  while the same household was able to afford 76 percent of homes for sale a year earlier.

However, affordability improved in Denver-Aurora-Lakewood, CO, Austin-Round Rock, TX, and Honolulu, HI. Although Denver is one of the fastest housing markets, the score increased from 0.57 to 0.66 in June. This means that a household earning $100,000 could afford to buy about 43 percent of the homes currently listed for sale in Denver; the same household could afford to buy 37 percent of homes for sale a year earlier.

For more information, view the Realtors® Affordability Distribution Curve and Score data page