The affordability gap is widening in the U.S. housing market.
Households earning $75,000 a year can only afford 21.2% of home listings as of March 2025, according to the National Association of Realtors (NAR) and Realtor.com 2025 Housing Affordability & Supply report. A year ago, such households could afford only 20.8% of home listings.
Prior to the pandemic, the sub-$75,000 a year group had access to 49% of listings. In a “balanced” housing market—where listings are aligned with what households at various income levels can afford—the cohort would need access to 48.1% of listings. To reach this threshold, the market needs 416,000 more listings priced at or below $255,000.
The lack of affordable houses remains a challenge despite for-sale housing inventory levels sitting 20% higher nationwide in March than a year ago. Despite the significant rise on a year-over-year basis, inventory levels are well below pre-pandemic norms.
“The housing market is at a turning point,” says Nadia Evangelou, senior economist and director of real estate research for the NAR. “More homes are hitting the market, and it’s encouraging to see the greatest housing-supply gains among middle-income buyers.”
Households earning $100,000 annually could afford 37.1% of listings in March, up from 36.9% a year ago, but far below the 64.7% they could afford in 2019. In a balanced market, the income bracket could afford 60.7% of listings; this would require an additional 364,000 listings priced under $340,000.
Low-income households, earning less than $50,000 annually, can only afford 8.7% of listings. These households represent one-in-three households and to reach a market balance, an additional 367,000 listings at a maximum price of $170,000 is required.
Conversely, buyers earning $250,000 or more can afford at least 80% of home listings.
“Shoppers see more homes for sale today than one year ago, and encouragingly, many of these homes have been added at moderate income price points,” says Danielle Hale, Realtor.com chief economist. “But as this report shows, we still don’t have an abundance of homes that are affordable to low- and moderate-income households, and the progress that we’ve seen is not happening everywhere. It’s been concentrated in the Midwest and the South.”
According to the report, 44% of the top 100 largest metropolitan areas are classified as “stuck in the middle,” where housing supply and demand are misaligned but not at crisis levels.
Twenty-six percent of the 100 largest metros are classified as “areas falling further behind,” where the gap from a balanced housing market continues to widen, worsening housing affordability. In these metros, the availability of listings has either declined over the past year or remains more than 20 percentage points below what is considered a balanced housing market. Large metros such as Los Angeles, San Diego, New York, and Spokane, Washington, fall into the “areas falling further behind” category.
From a state perspective, Iowa, Ohio, Indiana, Illinois, and West Virginia are the most balanced states for housing market conditions. In these states, households earning $75,000 can afford more than 45% of the for-sale listings. Montana, Idaho, California, Massachusetts, and Hawaii have the largest shortfalls in affordable housing.
