Realtor.com: Less Than One-Third of Homes Affordable for Typical Household

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Realtor.com, Santa Clara, Calif., released a new report finding that just 28% of homes on the market are currently priced within reach of a typical household in the U.S.

Nationally, the maximum affordable home price for a median-income household has dropped to $298,000, nearly $30,000 less than in 2019. Realtor.com generally defines affordable as when a household spends no more than 30% of its monthly income on a mortgage payment.

However, buying power varies by location. Milwaukee-Waukesha, Wis., has seen the greatest drop in buying power since 2019, by 10.5%. In 2019, a median earner could afford a $314,000 home. Today, it’s $281,000.

Next is Houston-Pasadena-The Woodlands, Texas, with buying power down 9.4%.

Baltimore-Columbia-Towson, Md.; New York-Newark-Jersey City, N.Y.-N.J.; and Kansas City-Mo.-Kan., all saw buying power drop 9.3% in the period.

In contrast, six markets have actually seen buying power improve from 2019, largely due to strong wage growth in the area. Topping the list is Cleveland, where buying power has improved by 4.4%. In 2019, a median-earning household could afford a house priced at $249,000, now it’s $260,000.

Also seeing buying power improvements are Phoenix-Mesa-Chandler, Ariz., (up 2.5%), Richmond, Va., (up 1.5%), Indianapolis-Carmel-Greenwood, Ind., (up 1.3%), Tampa-St. Petersburg, Clearwater, Fla., (up 0.4%), and Austin-Round Rock-San Marcos, Texas (up 0.3%).

However, even in the six markets where buying power has improved, none currently have a higher share of homes for sale that are affordable for median earners compared with 2019.