How a Housing Shortage and High Prices Are Hurting the Middle Class
by Michael Hofmeister 02/09/2022
Home prices are quickly exceeding home buyer budgets as limited inventory pushes affordability further out of reach
Fast-rising home prices and a meager housing supply are hurting middle-class and first-time buyers incapable of expanding their budgets to keep up with a 30% year-over-year price surge since the start of the COVID-19 pandemic in early 2020, according to Realtor.com.
Buyers with a household income between $75,000 and $100,000 are limited to roughly 51% of total homes listed for sale, compared with 58% in 2019. That amounts to a supply of just 245,300 affordable homes nationally for middle-class buyers. Those with household incomes between $50,000 and $75,000 found even less availability with a total of 165,280 affordable homes, and as supply dwindles, prices are on the rise.
“Due to rising home prices and the ongoing inventory shortage, homeownership attainment will become especially challenging for middle-class buyers unless significantly more entry-level housing units become available,” Nadia Evangelou, NAR’s senior economist and director of forecasting, said in a statement. “Otherwise, the wealth gap between middle-income and upper-income households may grow even further.”
The 10 best metropolitan areas for buyers with household incomes between $75,000 and $100,000 were mostly in the South in less expensive areas that have had more new construction. These places all had more homes for sale at the right price for these buyers.
Courtesy ProBuilder Magazine
February 8, 2022
