A recent report by the National Association of Realtors and Realtor.com highlights a significant challenge in the US housing market: affordability for middle-income households. Despite an increase in housing supply, middle-income earners ($75,000 annually) can only afford 21.2% of available listings, down drastically from 49% in 2019.
The report reveals a paradox: while middle-income households have seen the largest improvement in housing supply among all income groups, they still face the largest housing shortage. This is because the available listings are often priced above their affordability range.
The main reason for this shortfall is the increasing difficulty in building homes under $260,000. This is primarily due to rising land costs, restrictive zoning rules, and high material prices.
The report also indicates that higher-income households ($100,000 annually) have also experienced a substantial decrease in affordable listings since 2019, while lower-income households have almost no access to for-sale homes.
The report underscores a critical need for increased housing supply, especially at price points accessible to middle-income families. This requires addressing rising land and material costs and reforming restrictive zoning regulations to create more affordable housing options.
In an ideal housing market, there would be a home that is affordable for every household based on income, from the lowest earners all the way to the wealthiest buyers. That kind of balance is hard to achieve, but as a new report reveals, middle-income households are being squeezed out of the market, even as listing inventory rebounds from its post-pandemic lows.
According to the 2025 Housing Affordability & Supply report from the National Association of Realtors and Realtor.com, middle-income earners, who make up the largest share of the nation’s households, have seen the greatest improvement in housing supply among all income groups. And yet, they can afford only 21.2 percent of all available listings. That’s up from 20.8 percent a year ago — but a far cry from the 49 percent they could afford in 2019.
The report, which sorted households by income level to examine the balance of purchasing power, defined “middle-income” households as those earning $75,000 annually, and showed that this demographic faced the largest housing shortage among all groups.
Ideally, explained Nadia Evangelou, senior economist and director of real estate research at the National Association of Realtors, households earning $75,000 a year should still be able to afford around half of all available listings across the country. But for that to happen, the market would need to add another 416,000 listings priced at or below $255,000, the ceiling of affordability for typical middle-income earners such as teachers, nurses and other skilled workers.
Households making $100,000 a year have also seen a huge shortfall since 2019 in the number of listings they can afford, according to the report, while lower-income households, which represent a third of all U.S. households, “have almost no access to for-sale homes.”
In the middle, buyers are losing ground because building a home for under $260,000 is increasingly difficult — the result of rising land costs, zoning rules and the price of materials, according to Ms. Evangelou.
“The middle-income paradox is that we have the largest gains for this income group in affordable housing supply but still continue to have the largest gaps in affordability and availability of homes,” she said.
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