The path to homeownership in America has become a steep uphill climb, with prospective buyers now needing a six-figure income just to get their foot in the door. According to a report from Oxford Economics, households now need to earn $107.7K annually to afford a single-family home — nearly double the $56.8K required just five years ago. Since the pandemic sparked a surge in home demand and prices, only 36% of US households can currently afford a home, down from 59% in 2019.

• The West Coast is leading the affordability crisis, with fewer than 15% of households in San Jose, Los Angeles, and San Diego earning enough to cover housing costs.
• More affordable options can be found in the Midwest and South, but even cities like Cleveland, Louisville, and Detroit require incomes ranging from $64.6K to $75.3K for homeownership.

Housing hurdles: The unaffordability is driven by a combination of resistance to new housing development and generationally high mortgage rates, which nearly doubled from 3.7% in 2019 to 7.3% in late 2023. These factors have pushed home sale prices to a national median of $420K. According to Brian Callaci and Sandeep Vaheesan from Harvard Business Review, “The market itself needs to be fixed … We need more — not less — muscular government involvement in housing, through price regulation, more robust planning, and even direct public provision.”