Many companies featured on Money advertise with us. Opinions are our own, but compensation and
in-depth research may determine where and how companies appear. Learn more about how we make money.

Photo Collage of multiple dollar bills folded up to look like a small house, stacked on top of each other in decreasing sizes
Money; Getty Images

While the current housing market is lacking in inventory overall, there’s a dire deficiency in the supply of homes that the middle class can actually afford to buy.

According to a new report from the National Association of Realtors (NAR) and, a household earning $75,000 can afford a home that costs $256,000 tops — but only 23% of home listings are priced below that amount at the moment.

Most U.S. households (51%) earn less than $75,000, so the authors of the report say that for the housing market to be in “equilibrium,” we’d need to see a majority of the homes on the market be in the sub-$256,000 range.

Instead, the number of homes in that budget is just a fraction of what would be needed for the market to be truly balanced based on income. And the gap is much worse than it was a few years ago.

Ads by Money. We may be compensated if you click this ad.AdAds by Money disclaimer
The first step to a new home is putting in the work and finding out how much you can afford
Mortgage Experts at Rocket Mortgage (NMLS #3030) are available to get you started on your home-buying journey with solid advice and priceless information. To find out more, click on your state today.
HawaiiAlaskaFloridaSouth CarolinaGeorgiaAlabamaNorth CarolinaTennesseeRIRhode IslandCTConnecticutMAMassachusettsMaineNHNew HampshireVTVermontNew YorkNJNew JerseyDEDelawareMDMarylandWest VirginiaOhioMichiganArizonaNevadaUtahColoradoNew MexicoSouth DakotaIowaIndianaIllinoisMinnesotaWisconsinMissouriLouisianaVirginiaDCWashington DCIdahoCaliforniaNorth DakotaWashingtonOregonMontanaWyomingNebraskaKansasOklahomaPennsylvaniaKentuckyMississippiArkansasTexas
View Rates

What the research says

Before the pandemic, the housing market was skewed toward homes priced outside the budgets of middle-class Americans, but the situation wasn’t nearly as bad. Homeownership has become increasingly unattainable for the middle class in recent years as prices have skyrocketed.

  • In April 2018, there were 810,000 home listings within the budget of a buyer earning $75,000. That figure has sunk to just 262,580 as of April 2023 thanks to home price growth and declines in inventory.
  • The market is “missing” a total of 320,000 listings under $256,000, according to the report. In 2018, the market was only missing 150,000 listings regarded as affordable to lower-earning households.

What it means for you

The number of homes for sale is increasing somewhat, rising 5% in the past year, but inventory is still low by historical standard as homeowners have some strong incentives against selling.

  • But the NAR report contends that despite low inventory, the market could be more accessible if the inventory was better balanced and included more affordable homes.
  • “Even with the existing level of homes available for sale, the housing affordability and shortage issues wouldn't be so severe if there were enough homes for all income levels,” the report says.

Ads by Money. We may be compensated if you click this ad.AdAds by Money disclaimer
Buy your new home with more convenience and less hassle
A Mortgage Expert at Rocket Mortgage (NMLS #3030) can lend you a hand for a smoother process. Your dream home is possible. Click below to make it happen.
View Rates

More from Money:

The Best Mortgage Lenders of 2023

'Do I Put Off My Dream?' Steep Down Payments Are a Nightmare for First-Time Homebuyers

2 in 3 Americans Planning to Buy a Home Are Waiting Until Mortgage Rates Drop