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Home affordability gap for first-time buyers widens as costs rise

Recent analysis from The National Association of Realtors shows first-time buyers are priced out of starter homes as prices outpace income. In WASHINGTON, experts note the widening affordability gap.
Defined as properties at 85% of median value by The National Association, starter homes face barriers from interest rates at 7.28% and rising costs, despite more existing today than 20 years ago.
Analysis of 177 metropolitan areas reveals about 80% have affordability scores below 100, meaning first-time buyers lack qualifying income. Purchasing requires at least $103,584 annually, while median income for buyers is about $72,100.
According to Pew Research Center, about 9 in 10 young adults believe buying a home is harder today than for their parents. Nadia Evangelou said, "For many people, their starter home became their long-term home."
Market affordability indices have remained low since around 2021, reflecting broader economic challenges. Evangelou also noted the typical starter home owner is now 59, complicating market entry for younger generations.

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