If you make $75,000, you probably can’t afford a home in these cities

For middle- and low-income families, homeownership is becoming increasingly unattainable.

Households earning the U.S. median income can only afford a fraction of the homes in the 100 largest U.S. cities, according to an analysis of real estate listings by the National Association of Realtors (NAR) and Realtor.com.

Even though 51% of U.S. households earn $75,000 or less, they could only afford 23% of the listings on the market in April, the study finds. 

In some cities, the shortage is even more acute. Here’s a look at the cities with the lowest share of affordable homes, based on buyers who earn $75,000, the U.S. median household income, or less.

For the purposes of the study, the maximum home price for each market is an estimate of what median income earners can afford, based on available listings, a 14% down payment and a 6.4% mortgage rate.

It’s not surprising that the five least affordable cities are in California, with San Jose taking top spot. While exact numbers vary, California is widely considered to have one of the worst housing shortages in the country.

Likewise, the Seattle area and Austin, Texas, are experiencing a deficit of affordable homes.

Overall, the U.S. needs at least 2 million more home listings to meet demand, says Nadia Evangelou, a senior economist at NAR who co-authored the study.

While residential construction has picked up since the spring of 2020, the nation’s longstanding shortage of homes is likely to last “for years,” according to several estimates. This will continue to put upward pressure on home prices, says Evangelou.

Rising mortgage costs haven’t helped, either, as mortgage rates have nearly doubled since the Federal Reserve started raising interest rates in March 2022.

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