Authored by Naveen Athrappully via The Epoch Times,

Homeownership is now considered a “luxury” in most of America’s largest cities due to a shortage of homes for sale, high property prices, and elevated mortgage rates, consumer services company Bankrate said in a Dec. 8 analysis report.

A typical household, which earns nearly $80,000 per year, is far short of the $113,000 required to afford a median-priced home worth $435,000 as of July, the report said. In some cities, buyers must now have more than $200,000 to afford the median-priced home.

“Nationally, over 75 percent of U.S. homes on the market are unaffordable to the typical household,” Bankrate said.

Typical households must make at least $33,000 more to afford median-priced homes.

Out of the 34 largest American metros analyzed by Bankrate, only about a dozen have more than 30 percent of properties that a typical household can afford, the company said. This affects even markets long considered to be affordable, such as San Antonio, Charlotte, and Philadelphia.

San Francisco had the highest income requirement, with prospective buyers having to make $353,500 annually to purchase a typical home. This was followed by Los Angeles, San Diego, New York City, and Seattle, all of which require more than $200,000 in income.

Detroit was the cheapest metro area, requiring only an income of $66,700 to buy a home. This was followed by Pittsburgh and Louisville, both of which required less than $80,000.

“Anyone earning the median U.S. income will find themselves priced out of three out of every four U.S. homes on the market,” Bankrate said.

“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 average sales price of homes sold in the United States jumped from $371,100 in the second quarter of 2020 to $512,800 in the same period this year, an increase of more than 38 percent over a five-year period, according to data from the Federal Reserve Bank of St. Louis.

Moreover, the average rate on a 30-year fixed-rate mortgage was 6.19 percent for the week ending Dec. 4, according to data from Freddie Mac. This is more than double the 2.71 percent rate roughly five years ago.

Amid high housing costs, inventory growth is slowing down, real estate brokerage Redfin said in a Dec. 4 statement.

Total housing supply is losing steam, and new home listings are stalling, the brokerage said.

“The pool of buyers is small partly because we’re entering the slow season for real estate, but it’s also because houses are expensive, rates are elevated, and people are feeling cautious about their pocketbooks,” said Carlos Castillo, a Redfin Premier agent in Los Angeles.

“House hunters may be able to find a deal because there are more sellers than buyers, but I’m advising buyers to be strategic. For instance, buyers can ask for concessions and offer less than the asking price, but don’t lowball too much.”

The National Association of Home Builders (NAHB) said last month that builder confidence remained in negative sentiment in November, citing factors such as rising construction costs and economic uncertainty created by tariffs.

On the positive side, the recent decline in mortgage rates has eased affordability conditions, NAHB Chairman Buddy Hughes said.

As for what lies ahead for the housing market next year, a Dec. 4 report from real estate marketplace Zillow predicts mortgage rates will remain above 6 percent.

“U.S. home values are forecasted to grow 1.2 percent in 2026 after national values were roughly flat in 2025,” Zillow said.

“Next year’s forecast reflects expectations of gradually improving affordability and steady buyer demand.

“Mortgage costs should ease a bit in 2026, helping more buyers stay in the market and supporting modest price growth in many parts of the country.”