Most homes in the United States — 75% — are now unaffordable for the average American, according to a new Bankrate analysis.
The report found that anyone earning the median U.S. income will be priced out of three out of every four homes on the market. The analysis deems a home affordable if its annual costs do not exceed 30% of the household’s income.
"Only a sliver of the housing market is affordable to the typical household," Bankrate data analyst Alex Gailey said in a CBS News interview. "That's when homeownership starts to feel less like a common middle-class milestone and more like a luxury."
Lower housing inventory, higher mortgage rates and slower wage growth are all part of the problem.
The typical household earns almost $80,000 per year, according to U.S. Census Bureau data. To afford a median-priced home of $435,000, a household would need to make $113,000 per year. In more expensive cities, like Seattle, San Francisco and New York, a homebuyer’s income would need to be over $200,000 a year.
When close to 50% of the real estate in a metro area is in an affordable range, homeowners of all incomes are typically able to pursue a path to homeownership easily, the Bankrate report says. But when that percentage drops, there’s more competition for the few affordable houses on the market, which can drive prices up further.
Bankrate found that in the priciest housing markets, like Miami, Los Angeles and San Diego, fewer than 1 in 50 listings are affordable for the typical household. Some cities, particularly in the Rust Belt and the South, are a little better. In Pittsburgh and St. Louis, homebuyers can afford one in two listings. In Detroit and Cincinnati, it’s two in five.
Homebuyers could see some relief in 2026 if mortgage rates drop. Rates are expected to hit 6.3%, down from an average 6.6% in 2025, which could bring a small amount of relief.
Image credit: Andrii Yalanskyi/Adobe Stock
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