U.S. Housing Affordability

A new Bankrate analysis finds that more than three-quarters of homes currently on the U.S. market are unaffordable to a typical household earning about $80,000 a year, given today’s prices, a 6.8% 30‑year mortgage rate and a 20% down payment. Using a 30%‑of‑income cap for all-in housing costs (including taxes and insurance), the study concludes a buyer now needs roughly $113,000 in income to afford the $435,000 median‑priced home, a $33,000 gap from the median household. Only 11 of the 34 largest metros have at least 30% of listings within reach of middle‑income buyers, while in Miami, Los Angeles and San Diego fewer than 1 in 50 homes for sale were affordable as of July. By contrast, about half of listings in Pittsburgh and St. Louis, and roughly two in five in Baltimore, Detroit, Cincinnati and Birmingham, Alabama, were deemed affordable relative to local incomes, reflecting stronger new construction and better supply in some Southern and Rust Belt markets. Housing economists quoted in the report say that without a meaningful increase in supply where people want to live, affordability is unlikely to improve much even if mortgage rates ease, and note that builders are pivoting toward townhomes, which now make up about 18% of single‑family construction, as a more attainable option.