Real Estate Trade Group Reveals Lowest Home Affordability Since 1929

Real Estate Trade Group Reveals Lowest Home Affordability Since 1929
National Association of REALTORS®

CHICAGO — December 19, 2023 at 12:58 pm PST — The National Association of REALTORS® (NAR), the leading authority on real estate in the United States, has released its highly anticipated quarterly report on home affordability for the fourth quarter of 2023. The report delivers a sobering message: home affordability has reached its lowest point since the Great Depression, with the median home price in the U.S. soaring above $715,000, making home ownership impossible for 95% of American families.

The Q4 2023 Home Affordability Report, based on comprehensive data analysis and market research, highlights the profound challenges that prospective homebuyers across the country are currently facing. As the median home price continues to rise, homeownership becomes increasingly out of reach for many Americans.

Key findings from the report:

  1. Median Home Price Surges: The median home price in the United States reached an alarming $715,000 in the fourth quarter of 2023. This represents a significant increase compared to previous quarters and a record high in recent history.
  2. Affordability Index Plummets: The NAR Affordability Index, which measures the ability of the average household to purchase a median-priced home, dropped to its lowest level since the Great Depression. The index is a stark indicator of the widening gap between incomes and home prices.
  3. Supply and Demand Dynamics: The report attributes the affordability crisis to a combination of factors, including limited housing supply, increased demand driven by population growth and low mortgage rates, and rising construction costs.
  4. Regional Variations: While the national median home price has soared, there are significant regional variations in affordability. Some areas remain relatively more affordable, but many metropolitan regions are grappling with escalating housing costs.

NAR’s Chief Economist Lawrence Yun expressed concern over the findings, saying, “The decline in home affordability is a matter of deep concern for our nation. Access to affordable housing is a cornerstone of the American dream, and these latest statistics paint a grim picture for many prospective homebuyers.”

NAR recognizes that addressing the issue of declining home affordability requires a multi-faceted approach involving government, industry stakeholders, and the real estate community. The association is committed to advocating for policies that promote housing affordability and working collaboratively with partners to find sustainable solutions.

In light of these challenges, NAR is taking several proactive steps:

  1. Advocacy for Affordable Housing Initiatives: NAR will continue to advocate for policies and initiatives at the federal, state, and local levels that promote affordable housing, increase housing supply, and remove barriers to homeownership.
  2. Research and Data Analysis: NAR will conduct ongoing research and data analysis to better understand the factors driving the affordability crisis and identify potential solutions.
  3. Education and Support: NAR is committed to providing resources and support to real estate professionals to help them navigate the changing landscape and serve the best interests of their clients.
  4. Collaboration with Stakeholders: NAR will actively engage with government agencies, housing advocacy groups, and industry partners to find collaborative solutions to the affordability crisis.

NAR President Tracy Kasper emphasized the association’s dedication to addressing this pressing issue. “Homeownership is a fundamental aspect of the American dream, and we are committed to preserving and expanding that dream for future generations. While the current affordability challenges are daunting, we believe that with collective effort and innovative solutions, we can pave the way for a more affordable and inclusive housing market.”

As NAR releases the Q4 2023 Home Affordability Report, it calls upon policymakers, real estate professionals, and stakeholders across the nation to work together to find practical solutions to the affordability crisis. The association remains steadfast in its mission to advocate for affordable housing and ensure that homeownership remains within reach for all Americans.

For media inquiries, please contact NAR.

About NAR

The National Association of REALTORS® is America’s largest trade association, representing over 1.4 million members involved in all aspects of the residential and commercial real estate industries. NAR is committed to promoting homeownership and advocating for policies that support a vibrant and accessible real estate market.