Housing Affordability Crisis: Worst Markets
- The housing market, still feeling the effects of pandemic-era low mortgage rates, faces a persistent challenge: a shortage of affordable homes.
- Those earning between $75,000 and $100,000 have seen a slight increase in the availability of homes they can afford.
- In contrast, higher-income households earning $250,000 or more have access to at least 80% of the housing market.
Understand the housing affordability crisis plaguing low-income buyers. A new report reveals a stark divide: while higher earners find options, those with lower incomes face a shortage of affordable homes. This impacts the housing affordability for many Americans, with the real estate market favoring those with higher incomes. Explore how inventory gains concentrate in specific regions, such as the Midwest, while others struggle. News Directory 3 insights shed light on the varying housing market trends across the country. Discover what’s next for homebuilders and how they aim to address the affordability gap.
Housing Affordability Crisis Persists for Low-Income Buyers
Updated May 28, 2025
The housing market, still feeling the effects of pandemic-era low mortgage rates, faces a persistent challenge: a shortage of affordable homes. While overall supply is improving, the benefits aren’t reaching lower-income buyers, according to a new report from the National Association of Realtors and Realtor.com. This impacts the housing affordability for many Americans.
The report highlights a growing divide. Those earning between $75,000 and $100,000 have seen a slight increase in the availability of homes they can afford. However,this group could afford nearly half of all listings in March 2019,compared to just over 21% in March of this year. For those earning less than $75,000, the situation is even more dire. A buyer with a $50,000 salary could afford less than 9% of available listings in March.
In contrast, higher-income households earning $250,000 or more have access to at least 80% of the housing market. The real estate market clearly favors those with higher incomes.
Danielle Hale,chief economist at Realtor.com, noted that while more homes are for sale, an abundance of affordable options for low- and moderate-income households is still lacking. She added that inventory gains are concentrated in the Midwest and south.
“Shoppers see more homes for sale today than one year ago,and encouragingly,many of these homes have been added at moderate-income price points,” said Danielle Hale,chief economist at Realtor.com. “But as this report shows, we still don’t have an abundance of homes that are affordable to low- and moderate-income households.”
While the national picture reveals these trends, the housing market trends vary significantly by location.Some Midwest markets, such as Akron, Ohio; St. Louis; and Pittsburgh, are considered balanced.Others, including Raleigh, North Carolina; Des Moines, Iowa; and Grand Rapids, Michigan, are making progress.However,over 40% of the nation’s 100 largest metropolitan markets,including Seattle and Washington,D.C., continue to struggle with affordability.
Some previously overheated markets like Austin, Texas; San francisco; and Denver have seen a substantial increase in affordable housing supply, now surpassing pre-pandemic levels. Conversely, Southern California markets like Los Angeles and San Diego, along with New York City, are facing worsening affordability due to factors like underbuilding, limited land, high construction costs, and restrictive zoning.
What’s next
Homebuilders are attempting to address the affordability gap, but face challenges with high costs and potential impacts from tariffs and immigration policies. Single-family housing starts in March were nearly 10% lower than the previous year, indicating a potential slowdown in new construction.