Only 28% of Homes on the Market are Affordable for a Typical Household

Rhea-AI Summary

Realtor.com (NASDAQ:NWSA) released its August 2025 Buying Power Report, revealing a significant decline in home affordability across the U.S. Only 28% of homes on the market are now affordable for typical households, with maximum affordable home prices falling to $298,000, down nearly $30,000 from 2019.

Despite a 15.7% rise in median income since 2019, higher mortgage rates near 6.75% have severely impacted buying power. Buyers now pay an additional $7,200 annually in financing costs for a $400,000 home compared to 2019 rates. Among major metros, Milwaukee saw the steepest decline in buying power (-10.5%), while Cleveland led the few markets showing improvement (+4.4%).

[ "Only six of 50 largest U.S. metros saw buying power increase since 2019", "Cleveland's buying power increased by 4.4%, with 50% of inventory remaining affordable", "Median household incomes have risen 15.7% since 2019" ]

Positive

• None.

Negative

• Only 28% of homes are now affordable for typical households, a significant decline
• Maximum affordable home price has fallen by $30,000 since 2019 to $298,000
• Higher mortgage rates are costing buyers an extra $7,200 per year on a $400,000 home
• Major metros like Milwaukee, Houston, and Baltimore saw 9-10.5% declines in buying power

Insights

Real Estate Economist

Housing affordability crisis intensifies with only 28% of homes now affordable for median-income households, despite rising wages.

The latest Realtor.com® Buying Power Report reveals a significant deterioration in housing affordability, with only 28.0% of homes on the market now affordable to median-income households—a stark contrast to previous years. The maximum affordable home price for typical American households has dropped to $298,000, down nearly $30,000 from $325,000 in 2019.

What's particularly concerning is that while median incomes have increased by 15.7% since 2019, this growth hasn't kept pace with the impact of higher mortgage rates. With rates hovering around 6.75%, buyers are facing an additional $7,200 in annual financing costs for a $320,000 loan compared to 2019 rates. This payment buys significantly less home than it once did—the same loan that could have purchased a median-priced home in 2019 now requires an additional 28% down payment to purchase today's median-priced home at $439,450.

The affordability crisis varies dramatically by market. Cities like Milwaukee, Houston, Baltimore, New York, and Kansas City have experienced the sharpest declines in buying power, with reductions of 9-10.5%. Meanwhile, only six major metros have seen any improvement in buying power since 2019, led by Cleveland with a 4.4% increase—yet even there, the share of affordable homes has decreased from 65.4% to 50.0%.

This affordability squeeze is reshaping buyer behavior and market dynamics. Many prospective homeowners are being forced to expand their search radius, consider smaller properties, or delay purchasing altogether. The supply-demand imbalance is particularly acute in the affordable segment, creating more competition for lower-priced homes while higher-priced inventory sits on the market longer.

For meaningful improvement in affordability, we'll need a combination of continued wage growth, moderating mortgage rates, and—most critically—substantial increases in housing supply, particularly in the affordable segment. Until then, both buyers and sellers must adapt to a market where financial fundamentals have fundamentally shifted against broad homeownership accessibility.

• Buying power is down nearly $30,000 nationally since 2019, despite a 15.7% rise in median income
• Higher mortgage rates are costing buyers an extra $7,200 per year in financing for a $400,000 home

AUSTIN, Texas, Aug. 21, 2025 /PRNewswire/ -- In a market defined by higher interest rates and persistent affordability challenges, a new report from Realtor.com^® reveals just how far buyers' budgets are being stretched. According to the August 2025 Buying Power Report, only 28.0% of homes on the market were priced within reach of the typical household as the maximum affordable home price for a median-income household in the U.S. has fallen to $298,000. The figure is down nearly $30,000 from $325,000, which is where it sat in 2019.

"Even as incomes grow, higher interest rates have eroded the real-world purchasing power of the typical American household," said Danielle Hale, Chief Economist, Realtor.com^®. "This dynamic is forcing many buyers to adjust their expectations, whether that means looking for smaller homes, moving farther out, or delaying the dream of homeownership altogether."

And while wages have risen 15.7% in the same time frame, they haven't kept pace with borrowing costs. With mortgage rates hovering near 6.75% through July, the monthly mortgage payment on a $320,000 fixed-rate loan is $600 higher than it would have been at 2019's average rate. That's an additional $7,200 a year out of the average buyer's pocket, and that payment won't buy what it used to. In 2019 a $320,000 loan would have covered the entire median home price while today it would need to be accompanied by a nearly 28% down payment to buy the typical-listing (priced at $439,450).

Where Buyers Have Been Hit Hardest
Buying power has dropped most dramatically in metros like Milwaukee, Wis., Houston,Texas, Baltimore, Md. New York City, and Kansas City, Mo., all of which have seen declines of 9–10.5% in what the median earner can afford. In Milwaukee, for example, which experienced the highest buying power percentage decrease of 10.5%, the maximum affordable home price fell from $314,000 to $281,000, a $33,000 drop.

While affordability declined, these metros still had a relatively high share of affordable homes—except for New York, where just 13.1% of listings in July were within reach of a median-income household.

Metro	2019 Max  Target Home Price	Share of Homes For Sale < Target (July  2019)	2025 Max Target Home Price	Share of Homes For Sale < Target (July 2025)	Difference in Max Target Price (2025 vs 2019)	Change in Buying Power (%)
Milwaukee-Waukesha, WI	$314,000	58.2 %	$281,000	28.3 %	-$33,000	-10.5 %
Houston-Pasadena-The Woodlands, TX	$330,000	59.2 %	$299,000	32.4 %	-$31,000	-9.4 %
Baltimore-Columbia-Towson, MD	$397,000	63.1 %	$360,000	42.7 %	-$37,000	-9.3 %
New York-Newark-Jersey City, NY-NJ	$397,000	28.2 %	$360,000	13.1 %	-$37,000	-9.3 %
Kansas City, MO-KS	$335,000	63.5 %	$304,000	34.2 %	-$31,000	-9.3 %

Where Has Buying Power Grown the Most?
Only six of the 50 largest U.S. metros saw buying power increase since 2019. Leading the way was Cleveland, Ohio, where strong wage gains helped boost the affordable home price from $249,000 to $260,000 (+4.4%). Also, an impressive 50% of inventory on the market in Cleveland in July was affordable to median-earning households.

Pandemic boomtowns like Phoenix, Ariz., Tampa, Fla., and Austin have seen a slight boost in buying power thanks to rising wages. But even with that progress, rapid home price growth has outpaced income gains, leaving few truly affordable options. In fact, in all six markets where buying power has improved, the share of homes affordable to median-income buyers is still lower than it was in 2019.

Metro	2019 Max Target Home Price	Share of Homes For Sale < Target (July 2019)	2025 Max Target Home Price	Share of Homes For Sale < Target (July 2025)	Difference in Max Target Price (2025 vs 2019)	Change in Buying Power (%)
Cleveland, OH	$249,000	65.4 %	$260,000	50.0 %	$11,000	4.4 %
Phoenix-Mesa-Chandler, AZ	$324,000	50.0 %	$332,000	13.7 %	$8,000	2.5 %
Richmond, VA	$326,000	56.8 %	$331,000	24.8 %	$5,000	1.5 %
Indianapolis-Carmel-Greenwood, IN	$298,000	64.3 %	$302,000	43.4 %	$4,000	1.3 %
Tampa-St. Petersburg- Clearwater, FL	$276,000	54.0 %	$277,000	21.6 %	$1,000	0.4 %
Austin-Round Rock-San Marcos, TX	$387,000	57.7 %	$388,000	31.5 %	$1,000	0.3 %

The Impact of Shrinking Buying Power and What Would Alleviate It?
Shrinking buying power isn't just a matter of dollars and cents, it's reshaping buyer behavior. As affordability declines, many buyers are competing more aggressively for lower-priced homes, turning to rentals when homeownership feels out of reach, or delaying their plans altogether—especially younger households without existing equity. This shift in demand also affects sellers, who may need to adjust pricing expectations or prepare for a longer time on market. Looking ahead, restoring lost buying power will likely depend on a combination of modestly lower mortgage rates, stronger wage growth, and most critically, a boost in housing supply, particularly in the affordable segment. Until those conditions improve, today's buyers will need to remain both strategic and flexible in navigating the market.

50 Largest Metros Data Changes in Buying Power Since 2019 (Alphabetical)

Geography	Median 2019 HH Income	2019 Max Target Home Price	Share of Homes For Sale < Target (July 2019)	Median 2025 HH Income	2025 Max Target Home Price	Share of Homes For Sale < Target (July 2025)	Difference in Max Target Price (2025 vs 2019)	Change in Buying Power (%)
USA	$68,073	$325,000	55.7 %	$78,770	$298,000	28.0 %	-$27,000	-8.3 %
Atlanta-Sandy Springs-Roswell, GA	$71,742	$343,000	60.7 %	$87,947	$333,000	31.4 %	-$10,000	-2.9 %
Austin-Round Rock-San Marcos, TX	$80,954	$387,000	57.7 %	$102,412	$388,000	31.5 %	$1,000	0.3 %
Baltimore-Columbia-Towson, MD	$83,160	$397,000	63.1 %	$95,068	$360,000	42.7 %	-$37,000	-9.3 %
Birmingham, AL	$58,366	$279,000	58.2 %	$71,644	$271,000	41.3 %	-$8,000	-2.9 %
Boston-Cambridge-Newton, MA-NH	$94,430	$451,000	38.1 %	$109,295	$414,000	9.6 %	-$37,000	-8.2 %
Buffalo-Cheektowaga, NY	$60,105	$287,000	70.1 %	$71,055	$269,000	47.1 %	-$18,000	-6.3 %
Charlotte-Concord-Gastonia, NC-SC	$66,399	$317,000	50.7 %	$81,514	$309,000	20.8 %	-$8,000	-2.5 %
Chicago-Naperville-Elgin, IL-IN	$75,379	$360,000	62.3 %	$86,627	$328,000	41.2 %	-$32,000	-8.9 %
Cincinnati, OH-KY-IN	$66,825	$319,000	68.9 %	$80,109	$303,000	43.1 %	-$16,000	-5.0 %
Cleveland, OH	52,178	$249,000	65.4 %	$68,695	$260,000	49.9 %	$11,000	4.4 %
Columbus, OH	$67,207	$321,000	64.6 %	$80,469	$305,000	34.8 %	-$16,000	-5.0 %
Dallas-Fort Worth-Arlington, TX	$72,265	$345,000	55.6 %	$88,783	$336,000	30.1 %	-$9,000	-2.6 %
Denver-Aurora-Centennial, CO	$85,641	$409,000	37.9 %	$106,833	$405,000	19.2 %	-$4,000	-1.0 %
Detroit-Warren-Dearborn, MI	$63,474	$303,000	63.5 %	$72,493	$275,000	48.8 %	-$28,000	-9.2 %
Grand Rapids-Wyoming- Kentwood, MI	$65,739	$314,000	63.5 %	$82,065	$311,000	31.9 %	-$3,000	-1.0 %
Hartford-West Hartford-East Hartford, CT	$77,005	$368,000	68.6 %	$94,838	$359,000	36.8 %	-$9,000	-2.4 %
Houston-Pasadena-The Woodlands, TX	$69,193	$330,000	59.2 %	$78,845	$299,000	32.4 %	-$31,000	-9.4 %
Indianapolis-Carmel- Greenwood, IN	$62,502	$298,000	64.3 %	$79,724	$302,000	43.4 %	$4,000	1.3 %
Jacksonville, FL	$65,880	$315,000	58.4 %	$81,893	$310,000	32.1 %	-$5,000	-1.6 %
Kansas City, MO-KS	$70,215	$335,000	63.5 %	$80,127	$304,000	34.2 %	-$31,000	-9.3 %
Las Vegas-Henderson-North Las Vegas, NV	$62,107	$297,000	43.8 %	$72,504	$275,000	12.8 %	-$22,000	-7.4 %
Los Angeles-Long Beach- Anaheim, CA	$77,774	$371,000	10.3 %	$91,380	$346,000	1.6 %	-$25,000	-6.7 %
Louisville/Jefferson County, KY- IN	$61,172	$292,000	64.7 %	$72,566	$275,000	40.9 %	-$17,000	-5.8 %
Memphis, TN-MS-AR	$54,859	$262,000	61.4 %	$66,946	$254,000	35.3 %	-$8,000	-3.1 %
Miami-Fort Lauderdale-West Palm Beach, FL	$60,141	$287,000	36.9 %	$74,274	$281,000	23.4 %	-$6,000	-2.1 %
Milwaukee-Waukesha, WI	$65,845	$314,000	58.2 %	$74,222	$281,000	28.3 %	-$33,000	-10.5 %
Minneapolis-St. Paul- Bloomington, MN-WI	$83,698	$400,000	67.3 %	$96,855	$367,000	37.0 %	-$33,000	-8.3 %
Nashville-Davidson-- Murfreesboro--Franklin, TN	$70,262	$335,000	46.4 %	$85,166	$323,000	11.8 %	-$12,000	-3.6 %
New York-Newark-Jersey City, NY-NJ	$83,160	$397,000	28.2 %	$94,960	$360,000	13.1 %	-$37,000	-9.3 %
Oklahoma City, OK	$60,605	$289,000	62.9 %	$71,503	$271,000	40.5 %	-$18,000	-6.2 %
Orlando-Kissimmee-Sanford, FL	$61,876	$295,000	51.3 %	$74,895	$284,000	18.2 %	-$11,000	-3.7 %
Philadelphia-Camden- Wilmington, PA-NJ-DE-MD	$74,533	$356,000	65.0 %	$88,483	$335,000	38.7 %	-$21,000	-5.9 %
Phoenix-Mesa-Chandler, AZ	$67,896	$324,000	50.0 %	$87,718	$332,000	13.7 %	$8,000	2.5 %
Pittsburgh, PA	$62,638	$299,000	71.6 %	$72,935	$276,000	54.6 %	-$23,000	-7.7 %
Portland-Vancouver-Hillsboro, OR-WA	$78,439	$375,000	30.1 %	$94,748	$359,000	11.4 %	-$16,000	-4.3 %
Providence-Warwick, RI-MA	$70,967	$339,000	49.5 %	$85,421	$324,000	8.4 %	-$15,000	-4.4 %
Raleigh-Cary, NC	$80,096	$382,000	60.3 %	$98,138	$372,000	29.7 %	-$10,000	-2.6 %
Richmond, VA	$68,324	$326,000	56.8 %	$87,394	$331,000	24.8 %	$5,000	1.5 %
Riverside-San Bernardino- Ontario, CA	$70,954	$339,000	36.1 %	$86,146	$326,000	8.5 %	-$13,000	-3.8 %
Sacramento-Roseville-Folsom, CA	$76,706	$366,000	29.6 %	$93,641	$355,000	8.0 %	-$11,000	-3.0 %
San Antonio-New Braunfels, TX	$62,355	$298,000	58.5 %	$73,281	$278,000	34.2 %	-$20,000	-6.7 %
San Diego-Chula Vista- Carlsbad, CA	$83,985	$401,000	14.0 %	$103,066	$390,000	3.2 %	-$11,000	-2.7 %
San Francisco-Oakland- Fremont, CA	$114,696	$548,000	18.4 %	$133,542	$506,000	11.9 %	-$42,000	-7.7 %
San Jose-Sunnyvale-Santa Clara, CA	$130,865	$625,000	9.9 %	$156,664	$593,000	6.3 %	-$32,000	-5.1 %
Seattle-Tacoma-Bellevue, WA	$94,027	$449,000	33.6 %	$113,456	$430,000	11.0 %	-$19,000	-4.2 %
St. Louis, MO-IL	$66,417	$317,000	72.9 %	$79,869	$303,000	52.2 %	-$14,000	-4.4 %
Tampa-St. Petersburg- Clearwater, FL	$57,906	$276,000	54.0 %	$73,079	$277,000	21.6 %	$1,000	0.4 %
Tucson, AZ	$56,169	$268,000	53.7 %	$67,909	$257,000	11.7 %	-$11,000	-4.1 %
Virginia Beach-Chesapeake- Norfolk, VA-NC	$69,329	$331,000	60.7 %	$80,312	$304,000	26.0 %	-$27,000	-8.2 %
Washington-Arlington- Alexandria, DC-VA-MD-WV	$105,659	$504,000	58.7 %	$123,209	$467,000	31.8 %	-$37,000	-7.3 %

Methodology:
2019 income data from 1-year ACS, 2025 income data from Claritas and is based on the latest census income estimates. Housing payments include principal and interest only, assuming 20% down payment, a 4% mortgage interest rate for 2019 and 6.74% mortgage rate for 2025. Maximum affordable housing payment calculated using the 30% affordability rule of thumb.

About Realtor.com^®
Realtor.com^® pioneered online real estate and has been at the forefront for over 25 years, connecting buyers, sellers, and renters with trusted insights, professional guidance and powerful tools to help them find their perfect home. Recognized as the No. 1 site trusted by real estate professionals, Realtor.com^® is a valued partner, delivering consumer connections and a robust suite of marketing tools to support business growth. Realtor.com^® is operated by News Corp [Nasdaq: NWS, NWSA] [ASX: NWS, NWSLV] subsidiary Move, Inc.

Media contact:  Asees Singh, press@realtor.com 

View original content:https://www.prnewswire.com/news-releases/only-28-of-homes-on-the-market-are-affordable-for-a-typical-household-302535069.html

SOURCE Realtor.com

FAQ

How much have home affordability and buying power decreased since 2019?

The maximum affordable home price has fallen from $325,000 in 2019 to $298,000 in 2025, a nearly $30,000 decrease. Only 28% of homes are now affordable for typical households.

Which U.S. cities saw the biggest decline in home buying power in 2025?

Milwaukee experienced the largest decline (-10.5%), followed by Houston (-9.4%), Baltimore (-9.3%), New York City (-9.3%), and Kansas City (-9.3%).

How much extra are homebuyers paying in mortgage costs compared to 2019?

With mortgage rates near 6.75%, buyers are paying an additional $7,200 per year in financing costs for a $400,000 home compared to 2019 rates.

Which cities showed improvement in home buying power?

Cleveland led with a 4.4% increase, followed by Phoenix (2.5%), Richmond (1.5%), Indianapolis (1.3%), Tampa (0.4%), and Austin (0.3%).

How have median household incomes changed since 2019?

Median household incomes have increased by 15.7% since 2019, but this growth hasn't kept pace with rising borrowing costs and home prices.