The Double Trouble of the Housing Market

Two in three renters cannot afford to buy a home; one in two renters pay more than 30% of their income for rent due to rising rental costs.

And it’s getting worse. Home prices continue to rise to record highs, eroding affordability even further. Since 2019, home prices rose nearly 30%. As a result, a typical home is about $80,000 more expensive than pre-pandemic. Wages may have also increased but not anywhere near the pace of the home prices. This means that potential buyers need to spend more of their budget on housing in order to buy the typical home now compared to 2019.

Meanwhile, inventory of homes for sale dropped significantly in the last couple of years, reaching record lows in 2021. In fact, ther was a housing shortage even before the pandemic hit in 2020.There are currently only around 1 million units available for sale compared to near 4 million homes available for sale in 2007.1 This translates to fewer options for homebuyers leading to multiple offers and competition in the housing market.

Table: Number of listings each household can afford to buy, by income level, in 2021 and 2019
Number of listings each household can afford to buy, by income level, in 2021 and 2019

So, "two troubles" are happening simultaneously: record high home prices and record low inventory. NAR Research and® partnered to do an analysis of affordability at different income levels for all active inventory on the market.

Specifically, this report looks at this dual phenomenon across the country and the 100 largest metro areas, comparing the number of available homes that people at any income level can afford to buy now and pre-pandemic. Connecting affordability with currently available housing supply is what makes this analysis unique.

Specifically, this analysis differs from previous research and measures on affordability:

a. It considers affordability for all income percentiles, not just median income. While looking at the median family income is a good representation of the middle of the market, the situation for those with incomes above or below the median family income can look quite different.

b. It looks at affordability of active inventory or homes currently available for sale instead of homes that have already sold. Thus, these are real-time listings. Most affordability indexes use home sales prices to determine housing affordability, so they are backward-looking. Using active inventory, we know what is affordable among homes currently available for buyers to put an offer on.

c. It connects the "two troubles" of the housing market. Rising prices erode affordability. Nevertheless, low inventory makes it even more difficult for homebuyers to purchase a home as there are significantly fewer homes that they can afford to buy.


For more information, check out the REALTORS® Affordability Distribution and Curve Score.

Download the full report

1 Inventory data in this statement are sourced from the National Association of REALTORS® as the data has a long history which goes back to 1999. In other sections of the analysis, inventory data is sourced from® which has a shorter data history but more granular local data. At the national level,® inventory data shows a smaller total, roughly half a million listings compared with NAR’s roughly 1 million listings. Differences in methodology stemming from classification of active or unsold homes as well as timing of the estimates largely account for the difference. Despite the different levels in the data series, the data tends to trend similarly over time.