For millions of people, the housing market in the United States has reached a structural and financial snag. More than 40% of the 100 biggest metro regions in the United States are experiencing serious housing affordability problems, per a recent analysis released by Realtor.com and the National Association of Realtors (NAR).
With the national median home price rising to $410,100 and mortgage rates staying at 6.75%, buyers—particularly those in the low and medium income ranges—are being priced out of the market. High-end markets are keeping constant, although home sales in these tiers are still underperforming.
Let's examine the areas where housing affordability is deteriorating, the factors causing the trend, and the ways in which certain local markets and experts are responding with remedies.
National Snapshot: Homeownership Slipping Away
Home prices in the United States have increased by more than 50% in the past five years, but incomes have not kept pace. Nowadays, a buyer must earn around $114,000 per year to afford a median home, which is over twice as much as was needed in 2019. In contrast, the median household income in the United States is somewhat less than $75,000.
The fact that the situation is no longer limited to big areas like New York, Los Angeles, or San Francisco is even more concerning. It is moving into smaller and mid-sized cities, such as Richmond, Virginia, and Asheville, North Carolina, where prices are rising more quickly than local wages and demand is exceeding supply.
Affordability in Asheville: A Market Under Pressure
The affordability situation is getting worse in Asheville, North Carolina, a city renowned for its natural beauty and cultural appeal. Prices have increased due to an increase in out-of-state investors and buyers. Only 63 residences under $200,000 were listed in 2024, down from 460 ten years ago, indicating a sharp decline in the quantity of such properties.
The city is trying to defend itself. The Housing Market Report from the City of Asheville states that initiatives include:
a $1.4 million down payment assistance program that offers incentives to first-time homebuyers.
Development initiatives such as 360 Hilliard Ave. provide locals with long-term, reasonably priced housing.
Longtime homeowners are receiving vital assistance from Asheville Cash Buyers, a local real estate solutions company, in navigating the crowded market. According to their team, "we've worked with a lot of sellers who are cash poor but equity rich." "Our goal is to provide them with a variety of selling options, sometimes assisting them with downsizing or local relocation without pressuring them into undesirable deals."
In addition to helping sellers, this strategy reduces supply pressure by allowing older housing stock to be renovated and resold.
Richmond, Virginia: A Market That Is Competitive and Has Few Entry Points
Similar trends have been observed in Richmond. The capital of Virginia, which was once thought to be reasonably priced, is currently dealing with a shortage of inventory, increased demand, and fierce competition, particularly in the lower-middle price range.
Minnesota Cash Home Buyers, a local home-buying business, has personally witnessed the growing sense of urgency among buyers and sellers. According to Cy, the founder, "we're seeing more distressed properties and people who would love to sell but can't afford to buy again locally." "We can move quickly and maintain property circulation with cash offers—something the traditional process is having trouble with."
This is particularly useful when homes require major repairs before being resold or in underprivileged areas where regular lending is more difficult to obtain.
What's Driving the Affordability Crisis?
- Mortgage Rate Volatility
Monthly payments for even modest homes have increased dramatically since 2020, when interest rates roughly tripled. At 3% interest, a $350,000 house may cost $1,450 per month; at 7%, that amount rises to more than $2,300. Millions of potential buyers would be eliminated due to the 60% monthly cost rise.
- Shortages in Inventory
Due to the extremely cheap mortgage rates that were obtained during the pandemic, many homes are "locked in." Consequently, fewer pre-existing properties are being listed for sale. Additionally, new buildings are unable to keep up, in part because of labor shortages and expensive expenses.
- The price of skilled labor and building supplies
Project viability has been significantly impacted by material costs and schedules, according to businesses like Gotham Welding, which offers structural steel and welding services to homebuilders and developers. "Unstable steel prices and a shortage of skilled tradespeople are causing builders to scale back or postpone projects," a Gotham representative stated. "Even major advancements are susceptible."
Housing starts lag in the absence of sufficient construction labor and reasonably priced materials, which exacerbates the shortage of supplies.
Metro Markets Are Suffering the Most
The following are the top metro regions where affordability is declining the fastest, per statistics from Realtor.com:
Migration during the epidemic led to a sharp increase in prices in Boise, Idaho.
Utah's Salt Lake City is growing quickly despite having little space.
Tech boom in Austin, Texas, increased demand
Charlotte, North Carolina: rising costs due to immigrants
Riverside, California: local prices are being impacted by the outflow from Los Angeles
Because there is more competition for anything even vaguely cheap, lower-tier homes are increasing in value more quickly than high-end ones in many of these locations.
Where It's Still Somewhat Affordable
Not every market has been lost. In comparison to the national average, cities like Pittsburgh, Pennsylvania; Buffalo, New York; Cleveland, Ohio; and Buffalo, New York, continue to provide reasonably priced housing. They might not, however, have the infrastructure or job growth that other thriving markets provide.
However, even in these regions, demand is increasing, so the affordability window might not last long.
Policy Solutions: What's Needed?
A number of real estate experts and economists propose a comprehensive strategy to bring the housing market back into balance:
Reforming zoning to make more inexpensive and multifamily housing possible
Incentives for developers to produce more affordable housing options than only luxury residences
Programs for first-time buyers that offer low-interest loans or help with the down payment
Funding mixed-income developments through public-private partnerships
In an effort to boost density without resorting to extensive construction, several communities are now experimenting with tiny dwellings and ADUs (accessory dwelling units).
The Role of Local Experts
Local companies and real estate experts are stepping in to provide workable answers as federal and state policies develop gradually. Sellers who might otherwise be locked in properties they can't afford or maintain can get instant liquidity and flexibility from companies like Cy Buys Richmond Houses and Asheville Cash Buyers. In the meanwhile, despite economic uncertainty, support companies like Gotham Welding help make development projects feasible.
These participants work together to preserve local housing mobility, providing buyers and sellers with genuine options in a challenging market.
Conclusion: A Housing Market in Need of Recalibration
The housing market's affordability problems in the United States is a long-term structural issue that extends beyond big metro areas to mid-sized cities. Although lower-income families and first-time purchasers are experiencing the most severe pain points, the economy as a whole is seeing the effects.
Policy innovation, industry collaboration, and grassroots action—from local buyers, sellers, and experts who know their markets best—will all be necessary to address the situation.
Millions of people will continue to be unable to afford housing as long as mortgage rates remain high and inventory is limited. However, there is still a way to create a more accessible and equitable housing market with local action, careful planning, and assistance from businesses like Gotham Welding, Cy Buys Richmond Houses, and Asheville Cash Buyers.
