A new study shows buying a home in America is becoming less affordable for the middle class and millennials.
The study was done by the National Association of Realtors and released on Monday by the Wall Street Journal.
According to the study, there were just over 400,000 homes last year on the market that were considered affordable, which is calculated by different income tiers on a 30-year fixed mortgage rate and not spending more than 30% of income on housing costs. The Journal points out that one in every 65 homes were considered affordable in 2021, compared to one out of every 24 homes in 2019.
In addition, the study shows that households earning between $75,000 and $100,000 could only afford 51% of the active housing inventory in December, a 58% drop from the same month in 2019. That’s the second largest drop in all income groups. The largest drop was incomes between $100,000 and $125,000, which was down 63%.
A monthly Fannie Mae poll shows consumer confidence is also down, with only 25% of Americans saying it’s a good time to buy a house, and 69% saying it’s a good time to sell.
Economist predict the housing market will continue to rise, with concerns of added unaffordability among younger home buyers.