Julia Sheers and her boyfriend want to buy a house. The housing market in Charlotte, N.C., just won’t let them.
They’ve run into the same wall as millions of other Americans: too few homes they can afford and too much competition for the ones that are in their price range.
Like many first-time buyers, the 29-year-old loan officer quickly discovered how steep the cost of homeownership has become when she started house hunting in May.
“If you told me a year or two ago that I’d be spending half a million dollars on a house, I would’ve thought you were crazy,” Sheers said. “But now it’s like, ‘Oh, that’s not bad. That’s a good price.’ Everything is definitely really expensive.”
In most of America’s largest cities, homeownership is now a luxury item that many cannot afford. A new Bankrate analysis of real estate and income data shows that anyone earning the median U.S. income will find themselves priced out of three out of every four U.S. homes on the market.
A big reason why: there simply aren’t enough homes up for sale right now. Homeowners who locked in ultra-low mortgage rates during the pandemic have been staying put, and builders haven’t kept up with demand since the Great Recession.
At the same time, home prices soared during the pandemic, followed by the steepest rise in mortgage rates in about two decades. With wages struggling to keep up, housing affordability has reached historically low levels in recent years.
The typical household earns almost $80,000 a year, according to the Claritas estimates of U.S. Census Bureau data, far less than the $113,000 needed to afford a median-priced home of $435,000 as of July. A prospective homebuyer’s income would need to top $200,000 to afford the median-priced home in Seattle, San Francisco and New York, according to Bankrate’s analysis.
The American dream — to the extent that it involves buying a home and raising your family — has become a lot tougher.
— Chen Zhao, head of economics research at Redfin
Even as that dream feels increasingly out of reach, Americans’ desire to own a home hasn’t faded. Prospective homebuyers routinely reach beyond what they can comfortably afford, experts say. And if they’re lucky enough to find that one in four that’s affordable, many times they’re seeing intense competition that pushes prices higher.
Inside the housing affordability data
To show how tough the market is for would-be buyers, Bankrate looked at a key statistic: the share of available homes in a given real estate market that are affordable to the typical household.
If close to 50% of the real estate in a metro area is within reach according to your income, you have options and a path to homeownership there, said Hannah Jones, senior economic research analyst at Realtor.com.
“But when you see that the typical household can only afford 30% or 20% of the homes on the market, that’s when the market is not calibrated well to the income levels of locals,” Jones said.
Bankrate’s analysis of Realtor.com data found that in the priciest housing markets like Miami, Los Angeles and San Diego, fewer than one in 50 listings are affordable to the typical household. That’s no surprise, given that average home prices in Los Angeles and San Diego exceed $1 million.
On the other hand, several large markets in the Rust Belt and South still offer a glimmer of hope and a measure of affordability in 2025. Typical homebuyers in Pittsburgh and St. Louis can still afford one in two listings, while it’s around two in five listings in Detroit, Cincinnati and Birmingham, Ala.
Out of the 34 largest U.S. metros, only about a dozen have more than 30% of listings that are affordable to the typical household, according to Bankrate’s analysis. Most fall below that threshold, including housing markets that have long been considered affordable, like Philadelphia, San Antonio and Charlotte.
The findings show how out of balance the nation’s housing market has become. Nationally, over 75% of U.S. homes on the market are unaffordable to the typical household, and the typical American household needs to make at least $33,000 more annually to be able to afford a median-priced house. In most of the nation’s largest metros, buying a typical home now takes at least a six-figure income.
$30K+ affordability gap for typical U.S. households
The typical household earns roughly $80,000 per year, while homebuyers need an income of at almost $113,000 afford a median-priced home in the U.S. ($435,000 per Redfin).
Differences in affordability from region to region often trace back to whether new houses are being built. In parts of the South and West, new construction is helping to grow supply. Jones said those regions have brighter outlooks than the Northeast and Midwest, where building has lagged and inventory levels remain 40% to 60% below pre-pandemic norms.
In Miami, for example, the median price for condos and single-family homes has increased over 80% since the COVID-19 pandemic, says Ana Bozovic, founder of Analytics Miami, a real estate data and analytics firm. She attributes the home price surge largely to Miami’s population boom over the past five years.
“There’s this flow of wealth and talent that’s coming here that’s really changing the landscape here for buyers at all levels,” Bozovic said. “That’s a force that isn’t going away.”
Similar dynamics have put homeownership out of reach in other coastal markets, too. Four of the 10 least affordable metros are in California, underscoring the state’s chronic housing shortage. Other markets where affordability is especially strained include Boston, New York and Seattle.
“ These places have always been expensive, but it has definitely intensified over the last five or six years as home price growth has outpaced wage growth,” Jones said.
How buying a home became so difficult and expensive
Housing experts say homeownership in America has reached its most challenging point in decades. Over half of Americans report their incomes haven’t kept pace with home prices, and one in five aspiring homeowners believe they may never save enough to buy, according to a 2025 Bankrate survey.
A wide body of research also shows average home prices are up roughly 50% across the country since 2020, and wages haven’t been able to keep up with the rapid home price growth.
Wages have grown 22% since the start of 2021, according to Bankrate’s analysis of Bureau of Labor Statistics data.
Ultra-low mortgage rates between 2020 and 2022 helped fuel a buying frenzy, and prices kept climbing even as rates began to rise. It wasn’t until this year that demand finally started to cool and supply began to grow in some Southern and Western markets. Still, most of the nation’s metros saw home prices continue to climb in the third quarter, according to a recent report from the National Association of Realtors.
When borrowing costs are high, competition intensifies for lower-priced homes, quickly depleting what little affordable inventory exists, according to Zhao. Many would-be buyers end up renting for longer, especially as rents continue to be significantly cheaper than mortgage payments in the short term.
On average, renting is cheaper than paying a mortgage in all 50 of the largest U.S. metros in 2025 — with the cost difference between the two growing in 38 metros since last year, according to a 2025 Bankrate analysis.
The root of the problem, though, is supply — particularly of affordable housing. The U.S. faces a housing deficit of about 4.7 million, driven by more than a decade of underbuilding after the Great Recession.
For a lot of these places, the issue is that there just simply is not enough housing for how many people who want to live there. If you had the supply of housing that was able to address the amount of demand, then it wouldn’t be the case that a low percentage of homes are affordable to a household with median income.
— Chen Zhao, head of economics research at Redfin
Adding to the burden, home insurance costs and property taxes have increased by double digits across the country. All of these pressures have pushed homeownership further out of reach, especially for younger buyers. The median age of a first-time homebuyer now stands at 40 years old, an all-time high, according to the National Association of Realtors.
Zhao said the U.S. housing market today resembles a story of the haves and have-nots. Those who bought during the pandemic before mortgage rates ticked up or who have owned homes long enough to benefit from years of price appreciation lucked out, according to Zhao.
Meanwhile, those who didn’t buy have seen their buying power shrink before their eyes, forcing them to settle for smaller homes, accept longer commutes or delay buying altogether, she said.
“The people who you know are finding homeownership to be easier either have higher income or they have family members who can help,” Zhao said. “There are also those who bought a home before 2022. If you were part of that group, you got pretty lucky.”
It took over a year for this Pittsburgh couple to buy their first home
Even in places considered havens for first-time buyers, like Pittsburgh, where roughly half of listings remain affordable, competition has intensified in recent years.
Allison Dunbar, a product development coordinator, and her husband, a business analyst, began house hunting at the end of 2022 in Pittsburgh. But they found themselves repeatedly outbid by investors or seasoned buyers. Between late 2022 and spring 2024, they made more than 20 offers, all of which were unsuccessful.
“When you’re trying to buy a home for the first time, it’s hard to compete,” Dunbar said. “It doesn’t feel like a shiny, picturesque experience. It felt like an extra job for the most part.”
Their luck changed in spring 2024 when they viewed a $250,000 home on a rainy Saturday. “Only like six people had walked through,” she said. They made an offer at the asking price, and this time, the seller accepted.
The couple used Pennsylvania’s first-time homebuyer program, which offers down payment and closing cost assistance but involves more red tape for sellers.
When you’re trying to buy a home for the first time, it’s hard to compete. It doesn’t feel like a shiny, picturesque experience. It felt like an extra job for the most part.
— Allison Dunbar, homeowner in Pittsburgh
“To lots of sellers, it’s a disadvantage because you have to go through different inspections,” she said. Still, they refused to waive any inspections. “It just didn’t feel right with us and we made sure to stick to our guns.”
When their offer was finally accepted, the relief was immediate. “It was a very much ‘pinch me’ moment,” she said.
Now, more than a year later, Dunbar said she and her husband are grateful for the stability of homeownership after such a long and uncertain search.
“It was a struggle,” she said, “but worth it, most likely.”
Will housing affordability ever improve?
Housing experts across the board seem to agree: The affordability crisis in the housing market isn’t going away anytime soon.
“It will be like slowly easing out of this affordability situation versus anything that’s going to just flip the switch,” Jones said.
Realtor.com forecasts a more balanced housing market in 2026 — one where home price growth steadies, a slight drop in mortgage rates offers more breathing room and bargaining power tilts more toward buyers.
For now, the market remains stuck in a tug of war between buyers and sellers. That leaves today’s buyers facing fewer choices, steeper prices and higher borrowing costs.
A modest drop in mortgage rates could bring some relief, but housing experts don’t expect them to fall anywhere near the historic lows of 2020 and 2021. Stronger wage growth would also help, though it will take time for wages to catch up to home prices, according to Jones.
“That’s really what we need to happen to get back to the same state of affordability that we were looking at before the pandemic,” Jones said. “ It’s a very long road.”
In the long run, experts say the only real fix is to build more homes, especially those affordable to middle-income households. Until supply and demand find better balance across the country, homeownership will continue to stay out of reach for millions of would-be buyers.
“Homeownership has become increasingly unattainable,” Zhao said. “There really is the story of the people who got in in time versus the people who did not.”
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