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Home affordability gap for first-time buyers widens as costs rise
National Association of Realtors data show first-time buyers can afford only 60% of median home prices as mortgage costs and rents rise.
- Recent analysis from The National Association of Realtors shows first-time buyers are priced out of starter homes as prices outpace income. In WASHINGTON, experts note the widening affordability gap.
- The National Association defines starter homes as properties at 85% of median value. Rising interest rates of 7.28% and elevated costs make these homes unaffordable, though more starter homes exist today than 20 years ago.
- Data from 177 metropolitan areas reveals that about 80% have affordability scores below 100. Qualifying for a typical starter home requires an income of at least $103,584, yet median first-time buyer income is about $72,100.
- According to Pew Research Center, about 9 in 10 young adults believe buying a home is harder today than for their parents. Nadia Evangelou, principal economist at The National Association of Realtors, said, "For many people, their starter home became their long-term home."
- Market affordability indices have remained low since around 2021, reflecting persistent economic challenges. Evangelou also pointed out that the age of the typical owner of starter homes is 59, complicating market entry for younger generations.
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Home affordability gap for first-time buyers widens as costs rise
Most young buyers can't afford a typical starter home, and about 80% of metro areas fall below affordability for first-time buyers.
·Oklahoma City, United States
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