It’s a bird’s eye view of single-family homes snuggled up against open space in Thousand Oaks, California, on April 18, 2025. Kevin Carter | Getty Images
The housing market has been on a rollercoaster ride ever since the pandemic hit, with rock-bottom mortgage rates fueling a frenzy of buying. However, this surge in demand has led to a shortage of homes and skyrocketing prices that are leaving many potential buyers in a bind.
According to the S&P CoreLogic Case-Shiller Index, home prices in March were a staggering 39% higher than they were in March 2019, before the pandemic struck. While prices continue to climb, the supply of homes is starting to improve, but not necessarily in the price range that buyers are looking for.
Affordability and supply are two key factors that are shaping the current housing market landscape. A recent report from the National Association of Realtors and Realtor.com delves into these issues, highlighting the challenges faced by buyers across different income brackets.
For middle- to upper-middle-income buyers earning between $75,000 and $100,000 annually, the supply of affordable homes has increased slightly from the previous year. However, compared to March 2019, the number of listings within their reach has significantly decreased, making it harder for them to find a suitable home.
On the other hand, lower-income buyers earning below $75,000 annually are facing an even tougher situation, with the supply of affordable homes dwindling further. Homes that were once within their reach are now out of grasp, making it nearly impossible for them to enter the housing market.
At the opposite end of the spectrum, higher-income households have no trouble finding homes that fit their budget. Buyers earning $250,000 or more annually can afford a large majority of listings, giving them a significant advantage in the current market.
While progress has been made in improving inventory levels in certain regions, the housing market remains challenging in many parts of the country. Markets in the Midwest, such as Akron, Ohio, and St. Louis, have achieved a balance between supply and demand, while others like Seattle and Washington, D.C., are still struggling to meet the needs of buyers.
Despite efforts to increase the supply of affordable homes, some markets are continuing to worsen. Cities like Los Angeles, San Diego, and New York City are facing a multitude of challenges, including high construction costs and restrictive zoning laws, which are hindering the development of affordable housing.
Overall, the housing market is a complex and dynamic environment that is influenced by a variety of factors. While progress has been made in some areas, there is still much work to be done to ensure that all buyers have access to affordable housing options. With the right mix of policies and initiatives, the market can begin to shift towards a more balanced and inclusive landscape for buyers of all income levels.
