Money Watch

Homeownership is considered a mainstay of the American dream, but a shortage of affordable homes is blocking that pathway for many middle-income families, according to a new analysis from the National Association of REALTORS®.

Only about 1 in 5 listed homes in March were affordable for households with $75,000 in annual income, down from about half of all listings before the pandemic, according to the analysis of property listings in the nation's biggest 100 cities. Rising home prices and higher mortgage rates are pushing many homes out of the price range for middle-class households, said Nadia Evangelou, senior economist and director of real estate research at the National Association of REALTORS® (NAR).

The affordability gap has its roots in the housing crisis that started in 2006, which caused new construction to dry up for years afterward, she added. The lack of affordable homes is partly responsible for driving up prices even higher, as would-be buyers often bid up home prices to secure a property, Evangelou said. The result: More middle-income families are getting shut out of the housing market in many regions.

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