The US housing market continues to slip further out of reach for many Americans, with only 28% of homes currently for sale being affordable for the typical household. According to a new report by Realtor.com, the maximum affordable home price has fallen to $298,000, down from $325,000 in 2019.
The report shows that even though incomes have grown over the past six years, they haven’t kept pace with the erosion in buying power caused by higher mortgage rates. The buying power report puts a tangible dollar value on this impact, highlighting the need for modestly lower mortgage rates, stronger wage growth, and increased housing supply to restore lost buying power.
The market’s struggles have led to changing buyer behaviors, including increasing competition for affordable homes, longer rental periods, and delayed plans to create families. Younger homebuyers, particularly millennials and Gen Zers, are facing the hardest time on the market due to a lack of equity they can leverage.
Sellers are also feeling the effects, with many being forced to slash prices or delist their properties as demand dwindles. The report suggests that restoring lost buying power will depend on a combination of these factors, which must improve for today’s buyers to navigate the market strategically and flexibly.
Source: https://www.newsweek.com/americans-can-afford-only-28-homes-market-2116122