Housing listings in recent years have tended to skew to an upscale market, according to a new study, so much so that the nation is in immediate need of at least 320,000 moderately priced residences.
That is the conclusion of a new and comprehensive study put together by the National Association of Realtors looking at the dearth of a middle market with homes valued at no more than $256,000.
To underscore recent industry trends, the report notes that as late as 2018, middle-income buyers could afford to buy up to 50% of the homes listed nationally. That figure, as of the spring of this year, is down to 23%.
“Ongoing high housing costs and the scarcity of available homes continues to present budget challenges for many prospective buyers,” remarked Daniel Hale, chief economist with the site Realtor.com, in comments accompanying the NAR report.
Hale added that those high housing costs are “likely keeping some buyers in the rental market or on the sidelines and delaying their purchases until conditions improve.”
The report, titled Housing Affordability & Supply, notes that there are currently more than 1 million homes for sale nationally. “If these homes were dispersed in a more adequate match for the distribution of households by income level, the market would better serve all households.”
Instead, “while household formation is rising faster than homes are being built, these missing homes in the middle-and lower-income price range add to the mismatch between housing demand and supply.”
Put another way, while households earning $75,000 or less can only afford to buy homes making up just 23% of the listings, buyers earning $250,000 or more can afford to buy 85% of current listings.
The numbers comparing where things stood in 2018 with today stand out in every income category: while in the previous year just under 30% of those making $50,000 or less could afford homes recently listed, today that figure for this same income category is down to just under 11%.
The further down the income level, the worst the options: just under 17% of those earning $35,000 or less in 2018 could afford recently listed homes, whereas today only 5% in that category could do so.
The report additionally notes that homes primarily in the Sunbelt had the least opportunities for those making $75,000 or less, while upwards of 51% to 72% of listings in certain parts of Michigan, Ohio, and Pennsylvania still had affordable homes in that category.
The numbers were even more stark demographically. According to the report, while 66% of Black Americans earn $75,000 or less, they can afford only 22% of today’s listed homes.
By Garry Boulard
