More than 75% of homes across the U.S. are unaffordable, study finds
As the gap between people’s earnings and home prices continues to widen, homeownership is becoming increasingly out of reach for most U.S. families, according to a recent analysis by Bankrate. The report found that more than 75% of homes across the country are unaffordable for the typical household, with housing costs exceeding 30% of their income.
Bankrate data analyst Alex Gailey stated, “Only a small portion of the housing market is affordable to the average household, making homeownership feel more like a luxury than a common middle-class milestone.” The ability to purchase a home has long been seen as a cornerstone of the American Dream, essential for building wealth. However, high home prices, driven by a nationwide shortage of affordable housing, have made it challenging for many Americans to achieve this goal.
According to the National Association of Realtors, only 24% of housing sales last year were made by first-time homebuyers, a significant decrease from 50% in 2010. The U.S. currently needs 4.7 million housing units to meet demand, as reported by Zillow. The median household income in 2024 was nearly $84,000, significantly lower than the $113,000 required to purchase a typical home priced around $435,000.
In cities like New York, San Francisco, and Seattle, households must earn at least $200,000 annually to afford the median-priced home. The homeownership rate in the U.S. has declined to 65% in 2025 from a peak of over 69% in 2004, according to the Federal Reserve Bank of St. Louis.
While some regions in the South and West have seen an increase in home construction, offering hope for aspiring homebuyers, the Northeast and Midwest continue to struggle with low inventory levels and lagging building rates. Policies such as stronger tax incentives and looser permitting requirements could help boost construction in these areas.
Looking ahead to 2026, there may be some relief for aspiring homebuyers. Mortgage rates are expected to dip to an average of 6.3% next year, a slight decrease from the 6.6% average in 2025, according to Realtor.com.
