Housing Market Needs More than 300,000 Affordable Homes

NAR recently released a report stating that the U.S. is about 320,000 affordable homes short, according to an analysis by NAR and Realtor.com®.

According to the report, the country needs more homes priced for middle-income buyers (defined as households earning up to $75,000). Affordable housing is defined as homes listed for up to $256,000. In April 2023, less than one-quarter of listings were under that price, while more than half (51%) of U.S. consumers are considered middle-income. In 2018, more than half of the homes listed were affordable to those earning a middle-income wage. Most of the inventory on the market today is unaffordable to the average American. Nearly a quarter of inventory was listed for $680,000 or above. In a balanced market, that percentage would be closer to 11%, not 23%.

Pittsburgh has one of the most balanced markets in the U.S., especially for middle-income buyers. Affordable inventory is at 52%, while it is 53% in a balanced market. “Pittsburgh has long afforded consumers the ability to become homeowners. Not only do we have lower listing prices for homes, but we have a wealth of culture and opportunities for people who do decide to buy here,” said PAR President-elect Preston Moore. “Pittsburgh is a great place to buy a home.”

Black Americans are impacted the most by this imbalance in the housing market. Close to two-thirds of Black Americans earn $75,000 or less, but can only afford 22% of homes on the market. However, only 48% of white Americans earn $75,000 or less and they too can afford just 22% of homes.

At the end of April 2023, around 1.1 million homes were listed for sale, and while that is a slight increase, more affordable inventory is necessary.