A recent report published by the National Association of Realtors reveals that the housing shortage and affordability crisis in the U.S. would be alleviated if there were sufficient homes available for buyers at all income levels. Currently, 51% of American households have an income of $75,000 or less, meaning they can only afford houses that are priced at $250,000 or lower. Data shows that of the 1.1 million homes listed for sale, only 25% are listed within that price range. To balance the market, the report indicates that there needs to be an additional 319,460 listings priced under $250,000.
The top five cities that have large supply shortages of affordable homes include El Paso, Texas; Boise, Idaho; Spokane, Washington; Cape Coral, Florida; and Lakeland, Florida. Conversely, Youngstown, Ohio-Pennsylvania is a region where buyers with an income of $75,000 can purchase 72% of the listings, exceeding the balanced market target rate of 66%.
The report also highlights that black Americans are the most behind on reaching equilibrium, with two-thirds earning $75,000 or less and can only afford 22% of the home listings. Whereas for white Americans in the same income bracket, 48% can afford to buy 22% of the listings. Overall, the report stresses the need for more affordable housing options to tackle the affordability crisis across all income brackets and racial and ethnic groups.
7 Personal Finance Tips to Kickstart Your Real Estate Portfolio
Given the data, it’s pretty clear that many prospective investors will need to add additional income from somewhere to get in the game. Whether you’re a novice investor looking to enter the real estate market or you’re planning to add to your real estate portfolio, here are some personal finance tips to help you reach your goals faster.
1. Start a side hustle
We know that owning real estate will help you grow your financial nest egg. But how can you get there if you’re in the median income…