Homes for sale are up nearly 20% compared to a year ago—a hopeful sign for a market that has struggled with limited inventory for over a decade. This increase may offer some relief to home buyers, particularly in areas where inventory gains are helping ease price pressures.
A spring report, Housing Affordability and Supply, released by the National Association of REALTORS® and realtor.com®, confirms that home buyers are starting to see more options. But the report also emphasizes that overall supply is still falling short of meeting demand in many markets—and deterring a major segment of prospective home buyers.
Nadia Evangelou, a senior economist and director of real estate research at the National Association of REALTORS®, underscores both the progress and the work that remains in solving this long-held problem in the housing market to allow more Americans to fulfill homeownership.
Which home buyers are struggling the most right now to find enough homes in affordable price ranges?
EVANGELOU: Unfortunately, what we see is that middle-income buyers are struggling the most. Even though these buyers have experienced the largest gains within the past year, they still have the furthest to go. They’re still priced out of more than half of the homes on the market.
Some local governments are trying to deal with this problem through zoning changes or incentives for more affordable construction. But we need a lot more of that. We need to have hundreds of thousands more homes priced under $260,000 just to get back to a balanced market. It’s a big gap, and it won’t close without targeted action.
Middle- and lower-income buyers are finding fewer listings that they can afford while higher income households have access to more. How do these disparities impact the overall market?
EVANGELOU: I think it really shows how uneven the playing field is right now. So, if you’re a high-income buyer, chances are you can shop across most of the market. But if you’re earning under $50,000 [per year], you’re looking at less than one in 10 listings being within reach. First-time and lower-income buyers are shut out, and it slows everything down. Move-up buyers can’t sell, and that limits overall [housing] activity.
Are new home builders stepping in to help make up this gap?
EVANGELOU: We have seen builders shift to building smaller homes. This shift started in 2024, so that is encouraging. The median square footage is at the lowest in more than a decade. But we need even more. It’s not that builders don’t want to build more affordable homes. It’s just that they often cannot make the math work. Between rising land costs, zoning rules and the price of materials, it’s hard to build a home under $260,000.
The NAR report does call out that some metro areas like Raleigh, N.C., and Des Moines, Iowa, are seeing progress in becoming more balanced, with enough affordable homes. What’s working in these regions? Are there any lessons we can apply to other markets?
EVANGELOU: What’s working in those areas is a mix of steady building, better alignment between incomes and home prices, and in some cases more flexible local policies. Raleigh, for example, has been adding more homes across different price points. It’s proof that if you increase supply—and not just with high-end homes, but homes that regular people can afford—you start to see results. And that’s a model other markets could learn from.
What long-term solutions are being pointed to in helping alleviate the housing inventory crisis, particularly for low- and middle-income buyers?
EVANGELOU: There’s no silver bullet, but there are some key things that can help. First of all, reform of local zoning and land use policies. Communities can adopt inclusionary zoning—allowing more duplexes, for example, and reducing barriers for building on small lots and for infill development to make it easier to build affordable homes.
We also should offer incentives for affordable construction to help it expand. Tax credits or financing for developers can help produce homes priced within the range of middle-income households. Policymakers can close the gap as well by extending down payment assistance programs.
Also, I think we should monitor local progress with data. Tools like The REALTORS® Affordability Distribution Score track where the gaps are narrowing. From that, we can see that metro areas like Raleigh or Grand Rapids, Mich., are making real progress, and their strategies could inform other areas’ best practices.
We have seen inventory overall improve in many markets. Do you think price pressures will ease in the coming months from the added inventory?
EVANGELOU: Price growth is definitely slowing in some areas, especially where inventory has grown the most, like parts of Florida, in the South or Midwest. That can offer some breathing room. But buyers in the more expensive coastal markets are not likely to see big changes unless we see more construction targeted at affordability. It really depends on the local dynamics.
Are more first-time home buyers becoming priced out?
EVANGELOU: That’s the big question. I think more inventory does help, but for many first-time buyers—especially those with lower incomes—the options are still pretty limited. The biggest hurdle isn’t just supply; it’s affordable supply. So, until we see more homes under $200,000 hitting the market, a lot of buyers unfortunately will still be left out.
You noted that down payment assistance can be a solution. Do you think expanding it would open up the market more?
EVANGELOU: These programs help with upfront costs usually in the form of a grant or a low-interest loan, which makes buying a home more achievable, especially for those who have good credit and income but who haven’t been able to save enough for a down payment. It could be what finally tips the scales for some buyers.
But we should also keep in mind that these programs work best when they’re paired with more affordable housing options. Because even with financial health, many buyers are still struggling to find homes within their price range.
So, while down payment assistance is a critical tool, it has to be part of a broader solution that also includes building more homes, especially homes priced for various incomes. Otherwise, we are just helping people compete for the same limited number of affordable listings.
Is there hope that the real estate market can move beyond what’s been called both a “housing shortage” and “affordable housing crisis?”
EVANGELOU: Yes, there is hope. Inventory is finally rising after years of shortages. That’s a big deal, but we have to ask what kind of inventory is being added. If it’s all at the high end, then it doesn’t move the scale. So, yes, things are moving in the right direction, but we are not out of the woods yet.
How can real estate professionals help home buyers navigate this challenging inventory landscape?
EVANGELOU: NAR members are absolutely essential in this kind of market. They can help buyers understand what they can afford, set realistic expectations and guide them toward programs that might help make homeownership possible, like down payment assistance. It’s still competitive in the housing market, especially in some areas, and having an expert in your corner can make all the difference.
