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After a herky-jerky few years, the housing market is at a major tipping point, according to the National Association of Realtors’ May 2025 Housing and Affordability Report.
The report, which is based on NAR and Realtor.com data, revealed the market needs at least 416,000 listings priced at or below $225,000 to make homeownership affordable to the typical middle-class household.
Currently, households earning annual incomes of $75,000 can only afford 21.2 percent of available housing — a slight improvement from March 2024 (20.8 percent), but far below pre-pandemic trends (49 percent). Households earning $100,000 are only doing slightly better, with them affording 37.1 percent of current listings, up from March 2024 (36.9 percent) but significantly down from March 2019 (64.7 percent).
Meanwhile, households making $50,000 have long struggled before the pandemic. Households in this income bracket can only afford 8.7 percent of listings, down from 9.4 percent in 2024. The market needs at least 367,000 listings priced at or below $175,000 to improve affordability, the report said.
Danielle Hale
“Shoppers see more homes for sale today than one year ago, and encouragingly, many of these homes have been added at moderate income price points,” Realtor.com Chief Economist Danielle Hale said in a written statement. “But as this report shows, we still don’t have an abundance of homes that are affordable to low- and moderate-income households, and the progress that we’ve seen is not happening everywhere. It’s been concentrated in the Midwest and the South.”
In NAR and Realtor.com’s study of the 100 largest metros, only four — Akron, Ohio; St. Louis, Missouri; Youngstown, Ohio; and Pittsburgh — are balanced, meaning home prices and local incomes are aligned, leading to a 15 percent or more increase in the availability of affordable homes.
Another 30 markets are closer to reaching balance, with the availability of affordable listings increasing at least 5 percent over the past year. Raleigh, North Carolina; Des Moines, Iowa; Grand Rapids, Michigan; Columbia, South Carolina; and Columbus, Ohio, have logged the greatest improvements from 2024, NAR said, thanks to favorable market conditions and legislators adopting housing policies that prioritize affordability.
Meanwhile, 44 percent of markets are “stuck in the middle,” where the average gap between what households can afford and what’s actually for sale is still more than 10 percentage points but less than 20 percentage points. Seattle; Washington, D.C.; Austin, Texas; Salt Lake City, and Denver are some of the key markets in a precarious situation, where the next few years will be key to determining whether they move toward balance or continue to fall behind.
The final 26 percent of markets have fallen behind, where the availability of affordable listings has either annually declined or remains more than 20 percentage points below what NAR considers a balanced market. Los Angeles; Oxnard, California; San Diego; New York City; and Spokane, Washington, are the top markets where affordability has crumbled, despite strong jobs and economic growth. In these cities, years of underbuilding and restrictive zoning laws have undercut any potential affordability improvements that come with a robust economy.
Nadia Evangelou
“It’s not just about economics — it’s about opportunity. When home prices outpace income growth by this much, it limits people’s ability to build equity, stay rooted in their communities, or move closer to jobs and schools. It becomes harder for teachers, nurses, police officers, and essential workers to live anywhere near where they work,” the report read. “What these metros need isn’t just more housing — it’s the right kind of housing, in the right places, and at prices that reflect the real lives of the people who call these areas home.”
Although some of the report’s findings are bleak, NAR Senior Economist and Director of Real Estate Research Nadia Evangelou said she’s still optimistic about the market’s ability to recover and yield more opportunities for homebuyers.
“Even in high-cost areas like San Francisco, we’re witnessing real progress,” she said in a written statement. “While the housing market remains far from balanced, current for-sale home listings better align with home buyers’ incomes compared to pre-COVID-19 levels — a clear reminder that improvement is possible.
“More homes are hitting the market, and it’s encouraging to see the greatest housing-supply gains among middle-income homebuyers,” she said.
