In America, owning a home has always been one of the most significant accomplishments, a symbol of the ultimate American Dream. Unfortunately, even with steady economic growth, a significant portion of the population remains far behind the property ladder, according to recent data from the National Association of Realtors (NAR). It turns out middle-income households, earning up to $75,000 annually, can only afford 23% of the homes listed for sale in the US, revealing a staggering 50% gap in a balanced market. In fact, there is a deficiency of nearly 320,000 affordable homes for moderate-income families, which typically cost up to $256,000. In comparison, the median price for homes in the US is a stunning $388,000.
Realtor.com Chief Economist Danielle Hale explains the fallout of high housing costs and scarcity on the buyers, “Ongoing high housing costs and the scarcity of available homes continue to present budget challenges for many prospective buyers. And it’s likely keeping some buyers in the rental market or on the sidelines and delaying their purchase until conditions improve.”
More importantly, the shortage of affordable homes isn’t just an inconvenience; it is also a significant hurdle to building wealth. “Put simply, there are currently more than 1 million homes available for sale. If these homes were dispersed in a more adequate match for the distribution of households by income level, the market would better serve all households,” NAR says in the report.
The Census data reveals that even people earning below the national median household income of about $75,000 are finding ways to buy their dream homes, realizing a record homeownership rate of 53%, the highest from 1994 when the agency first began tracking data.
Despite the rise, for many Americans of modest means, the property ladder is still out of reach. According to NAR’s findings, the Midwestern region tends to have more affordable homes, with cities such as Akron, Toledo, and Youngstown boasting the most. On the flip side, El Paso, Boise, and Spokane rank among the places least accessible to middle-income house hunters, while real estate in traditionally affordable southern states such as Florida and Texas remains beyond the means of even its citizens.
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