The Middle-Income Housing Shortage

By: Krystal Etienne · June 12, 2023 · Reading Time: 3 minutes

Housing Hurdles

Recent data from the National Association of Realtors® throws light on a pressing issue in the US housing market. Prospective homebuyers are facing an unprecedented shortage of options — middle-income families in particular.

Households earning up to $75,000 annually are contending with comparatively high scarcity. The market is short of more than 300,000 affordable homes typically available for this bracket.

The struggle isn’t due to an inability to qualify for or afford a mortgage. These buyers, who fall within a household purchasing capacity of up to $256,000, may have the means to afford their dream home — just not the opportunity.

Middle-Income Mirage

Middle-income buyers can afford just 23% of the listings on the market today. This percentage seems especially slim when contrasted with the landscape five years prior, where this income group had the capability to buy roughly half of all available homes.

The leading culprit: the median house price has consistently outpaced wage growth. This in turn has led to a market contraction for middle-income buyers.

Given that homeownership has long been regarded as a pillar of stability and wealth generation, this remains a significant pain point for prospective buyers. However, rather than viewing this purely as a hindrance, it could be seen as an opportunity, redefining where and how to buy.

Location Adaptation

The impact of the housing shortage isn’t uniformly distributed across the country. There are more options for middle-income buyers in areas like Ohio’s Youngstown Metro, where those buyers can afford 72% of the listings on average. Meanwhile, options in places like Spokane, Washington and Boise, Idaho lie on the opposite end of the spectrum.

Some are also exploring alternative housing strategies, considering rental options and newly constructed homes. While this might disrupt the conventional path to homeownership, it introduces an exciting diversity of options.

For middle-income earners, this new landscape will definitely prove challenging, but it might also be an opportunity to discover new communities and opportunities beyond what you may have imagined. With an open mind, some due diligence, and creative thinking, you may find the dream home you never knew you were looking for.

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