Affordable Housing Crisis Continues to Widen

Median Family Income & Housing Supply

You know we're facing a housing crisis in this country, but how is that affecting the average family in the US? The median family income in the US is sitting at $75,000. By definition, that means 51% of the family households in the US are making $75,000 or below. Taking into account today's interest rates, a family with the median income can afford to purchase a home priced at $256,000. For the housing market to be balanced and to be affordable, we would need 51% of available housing in the US to be at or below that $256,000 price point. Unfortunately, we're nowhere close to that here in the US.

We're at less than half of that, we're actually sitting at 23%. You would think it'd be better here in the South, here in the Huntsville, AL area, but I pulled the stats of last month's data and it's actually even worse. We're sitting at 17%. That means we only have 1/3rd of a housing affordable housing supply that we need for the median priced incomes in this area.

Housing Deficits in Median Family Income Ranges

Take a look at this chart on page six and you’ll see it’s not only the median family income range of $75,000, it's really across the board. Starting at $25,000 median family incomes all the way up to $200,000, we're at a 100,00 home deficits across the US at each one of those income brackets.

It actually gets much worse in the $35,000 to $150,000 family income range. We're getting up to 200,000+ home deficits and it peaks at that median family income at nearly 320,000 homes. We have a huge deficit across the spectrum in all price points and all family incomes, but it’s much worse for that median family income that we really need to focus on. If you add all these numbers up and look at what economists are saying, we're at least at a 3 million to 6+ million home deficit across this country.

How This Affects You

What does that mean to you? Basically, housing affordability and supply is not going to get better any time soon. I'm hearing predictions of at least ten years but I personally think it'll be at least 10 to 15 years if we get our act together today in terms of making a dent in this housing shortage that we have and especially affordability.

It looks like interest rates are likely to come down in the next 12 to 24 months. I would not wait. I would find a way to buy a home today, lock in that price and lock in your home. Marry the home, date the rate, and look to refinance over the next couple of years as you potentially get a better interest rate environment.

As we get into a better interest rate environment, there's so much demand sitting on the sidelines that's likely going to push prices up exponentially again unfortunately. My suggestion is take advantage of the market we're in today to get more favorable terms in terms of price and negotiations on your home, then ride that out for when interest rates come down.

If you're not a homeowner yet but would like to be, shoot us an email at or contact us here. There are some affordable options that are out there and there are actually some affordable new construction options that a lot of buyers are simply not aware of yet that we would like to help you get into.

Posted by Matt Curtis on


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