Current:Home > MyMost homes for sale in 2023 were not affordable for a typical U.S. household -Blueprint Money Mastery
Most homes for sale in 2023 were not affordable for a typical U.S. household
View
Date:2025-04-14 23:49:09
If you found the U.S. housing market impossible this year you were not alone. In fact, you were in the vast majority, according to a new analysis by the real estate group Redfin.
Just 15.5% of homes for sale were affordable for a typical U.S. household, the lowest share since Redfin started tracking this a decade ago. A home is deemed affordable if the estimated mortgage payment is no more than 30% of the average local monthly income.
Affordability plunged 40% from before the pandemic, and 21% from just last year. Redfin says spiking mortgage rates were a key reason why.
Normally, higher rates should push home prices down. But Redfin also finds the number of affordable home listings dropped sharply in 2023. That's partly because many people don't want to sell now and give up a much lower mortgage rate, and that tight market has helped keep prices high.
Redfin finds white households could afford far more listings than Hispanic and — especially — Black households, who've faced decades of housing discrimination. Only 7% of listings this year were affordable for a typical Black household.
There were also enormous geographic differences. The biggest drops in affordability were in smaller cities, including Kansas City, Mo., Greenville, S.C., and Worcester, Mass. The report says that's "because housing costs have relatively more room to rise, and local incomes are often climbing at a fraction of the pace that mortgage payments are."
By contrast, San Francisco's affordability was down only a smidge, but it could hardly have gone lower — just 0.3% of homes for sale in 2023 were affordable for the typical Bay Area household.
The U.S. affordable housing shortage is years in the making
Another reason for out-of-reach housing costs is a severe housing shortage that's years in the making. The U.S. has not built enough new homes since the housing crash of 2008 to meet demand, creating a deficit of millions of units. That's pushed up not only home prices but also rents, and the gap in affordability is worst for the lowest-income households.
Housing experts say this shortage and high prices are a main driver of record U.S. homelessness rates. In an annual count announced this month, the Biden administration said more than 650,000 people had slept outside or in shelters on a single night in January 2023. The number jumped 12% from the year before, and it came as much of the sweeping pandemic aid that had kept people from being evicted ran out.
More cities and states are loosening their zoning laws to encourage construction, a move they hope will eventually bring down overall prices. This year did see a record number of apartments under construction, although economists say it will take years to find a balance.
Still, for those who will still be in the homebuying market in the new year, the Redfin report finds some cause for optimism.
"Many of the factors that made 2023 the least affordable year for homebuying on record are easing," wrote Redfin Senior Economist Elijah de la Campa.
Inflation and mortgage rates have come down. And home prices are growing more slowly as more people list their homes for sale, a trend de la Campa expects to pick up after the holidays.
veryGood! (24)
Related
- Krispy Kreme offers a free dozen Grinch green doughnuts: When to get the deal
- 10 best new TV shows to watch this fall, from 'Matlock' to 'The Penguin'
- US filings for unemployment benefits inch up slightly but remain historically low
- Chappell Roan Steals the Show With 2024 MTV VMAs Performance Amid Backlash for Canceling Concerts
- Man can't find second winning lottery ticket, sues over $394 million jackpot, lawsuit says
- Firefighters hope cooler weather will aid their battle against 3 major Southern California fires
- Southern Baptist trustees back agency president but warn against needless controversy
- Pac-12 adding four Mountain West schools Boise State, San Diego State, Fresno State, Colorado State
- 'Squid Game' without subtitles? Duolingo, Netflix encourage fans to learn Korean
- Georgia Republican leader seeks changes after school shooting, but Democrats want more
Ranking
- In ‘Nickel Boys,’ striving for a new way to see
- Week 3 college football predictions: Expert picks for every Top 25 game
- 16 Super Cute Finds That Look Like Other Things (But Are Actually Incredibly Practical!)
- Why Olivia Rodrigo Skipped the 2024 MTV VMAs
- Elon Musk's skyrocketing net worth: He's the first person with over $400 billion
- WNBA players deserve better, from fans and their commissioner
- Dutch adopt US war graves to harbor memories of the country’s liberation 80 years ago
- Young women are more liberal than they’ve been in decades, a Gallup analysis finds
Recommendation
San Francisco names street for Associated Press photographer who captured the iconic Iwo Jima photo
Ex-Indiana basketball player accuses former team doctor of conducting inappropriate exams
'All My Children' alum Susan Lucci, 77, stuns in NYFW debut at Dennis Basso show
Justin Timberlake Strikes Plea Deal in DWI Case
Mets have visions of grandeur, and a dynasty, with Juan Soto as major catalyst
Why Chappell Roan Told MTV VMAs Attendee to Shut the F--k Up
The prison where the ‘In Cold Blood’ killers were executed will soon open for tours
California Slashed Harmful Vehicle Emissions, but People of Color and Overburdened Communities Continue to Breathe the Worst Air