Over 75% of U.S. homes on the market are unaffordable to the typical household, according to a Bankrate analysis.
The big picture: Persistently high home prices and mortgage rates are only part of the squeeze. In many places, there simply aren't enough homes available.
State of play: In only 11 of the 34 largest U.S. metros do at least 30% of listings fall within reach of middle-income households.
- In ultra-pricey Miami, Los Angeles and San Diego, fewer than 1 in 50 homes for sale were attainable to the typical household, as of July.
The other side: Several Rust Belt and Southern metros saw roughly half of homes affordable relative to local incomes, offering the clearest path to homeownership, researchers say.
- Buyers could afford 1 in 2 listings in Pittsburgh and St. Louis, and roughly 2 in 5 in Baltimore, Detroit, Cincinnati and Birmingham, Alabama.
Between the lines: The median U.S. household earns roughly $80,000 a year, per the analysis, which looked at census data.
- That's $33,000 less than the $113,000 needed to afford a $435,000 median-priced home.
- Researchers considered homes affordable if annual housing costs (including insurance and property taxes) were below 30% of a household's gross income.
What they're saying: Regional affordability gaps largely come down to new construction.
- Parts of the South and West, where homebuilding has boosted supply, "have brighter outlooks than the Northeast and Midwest, where building has lagged and inventory levels remain 40% to 60% below pre-pandemic norms," Realtor.com's Hannah Jones said in the report.
What we're watching: Builders are leaning into townhomes as a more attainable option for first-time buyers.
- Townhomes lately made up 18% of single-family homebuilding — nearly double their share from a decade ago, said Robert Dietz, chief economist at the National Association of Home Builders, at a December event.
The bottom line: "Without a meaningful increase in housing supply, particularly in places where people want to live and work, affordability is unlikely to improve even if mortgage rates ease," Bankrate data analyst Alex Gailey tells Axios.
