A new Realtor.com report highlights a dramatic increase in the income required to purchase a typical starter home in the United States, with the annual household income needed rising from approximately $43,000 in 2019 to about $78,000 in 2024—an increase of over 80% that has significantly outpaced wage growth and left many first-time buyers unable to enter the housing market [1]. According to Hannah Jones, senior economist at Realtor.com, 'First-time buyers aren't sitting on the sidelines because they don't want to own a home—it's because, for many of them, it's just not possible right now' [1].
The report reveals that while the supply of starter homes has slowly improved since the pandemic housing crunch, persistent high mortgage rates, elevated home prices, and a shortage of affordable listings continue to hinder many aspiring homeowners [1]. The recovery in starter-home inventory has been uneven across regions. The South has experienced the strongest turnaround, adding nearly 170,000 affordable listings since 2022 and seeing starter-home prices decline by 3.5% from their pandemic peak [1]. The West has seen the largest improvement in affordability, with starter-home prices falling 7.3% from their 2022 peak, particularly in markets such as Denver, Phoenix, and Colorado Springs [1].
In contrast, the Northeast has seen affordability worsen, with the typical starter home now costing about $444,000 and prices rising 12.6% since 2022 [1]. The Midwest remains the most affordable region in absolute terms, with more than half of homes listed below $350,000, though affordability there is also eroding as prices continue to climb [1]. Housing experts cited in the report argue that expanding homebuilding, especially of smaller homes and lots, is one of the most effective ways to improve affordability for first-time buyers [1].
Overall, the analysis paints a mixed picture for first-time buyers, with regional disparities in affordability and inventory shaping the prospects for homeownership across the country [1].
CONCLUSION
The Realtor.com report underscores the growing challenge for first-time homebuyers, as the income needed to afford a starter home has surged well beyond wage growth. While some regions, particularly the South and West, are seeing improvements in affordability and inventory, others like the Northeast face rising prices and limited supply. The market remains difficult for many aspiring homeowners, with regional differences playing a key role in accessibility.