Map Shows Where Home Buying Power Has Grown Across U.S.

Newsweek

9 hours ago

Based on facts, either observed and verified firsthand by the reporter, or reported and verified from knowledgeable sources.
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In only six of the country's 50 largest metropolitan areas, homebuyers now have more power than they did in 2019, according to a new report by Realtor.com, with Cleveland, Ohio, leading the way.
In the rest of the country, Americans' homebuying power has shrunk significantly over the past five years, as skyrocketing home prices and historically elevated mortgage rates have plunged the country into a housing affordability crisis.
Nationwide, Americans had 8.3 percent less buying power last month than they had in July 2019, according to Realtor.com, and the typical U.S. household could afford only 28 percent of the homes for sale on the market.
Where Buyers Now Have More Power Than Before The Pandemic
"This report shows that even though buying power has dropped nationwide and in most markets, there are some areas where the typical household has seen strong income growth and can now afford to purchase a more expensive home while staying within typical affordability guidelines," Danielle Hale, chief economist at Realtor.com, told Newsweek.
These include markets like Cleveland, Ohio; Phoenix, Arizona; Richmond, Virginia; Indianapolis, Indiana; Tampa, Florida; and Austin, Texas—the only six major metros where buyers now have more power than in 2019.
"The common thread across these metros is that incomes have risen substantially in these areas," Hale said.
Job growth is a big part of the story of how homebuyers acquired so much power in these markets.
"Job growth in the last 6 years across all of the 50 largest metros has been 5.8 percent but averaged 10.9 percent across these six markets with each, except Cleveland, coming in well above the U.S. average job growth," Hale said.
In Cleveland, strong wage gains have boosted the affordable home price from $249,000 to $260,000 between July 2019 and July 2025, a growth of 4.4 percent. In the city, median-earning households could afford 50 percent of the homes for sale on the market—an ideal, perfectly balanced housing market.
Rising wages have also led buyers to have more power in the pandemic boomtowns of Phoenix, Tampa, and Austin, even though home price growth in these cities has far outpaced those increases.
Even in these rare parts of the country where homebuyers now have more power over sellers than five years ago, the share of homes affordable to median-income buyers is still lower than it was in 2019.
Despite Gains, Affordable Options Are Still Rare
Research from Realtor.com and the National Association of Realtors has shown that rising inventory "has been concentrated in the median and above-median price tiers, while lower-income households still see lower affordability," Hale said.
"Even in markets where income growth has helped boost homebuyer purchasing power, the rise in home prices has pushed the share of homes that are affordable to the typical household lower," Hale said.
For a market to be considered affordable, buyers' income needs to keep up with housing costs, financing costs or mortgage rates need to be accessible, and home prices must be reasonable. At the moment, none of these requirements is being met.
"In most markets right now, income growth has not kept pace with higher costs stemming from rising mortgage rates. Even in the handful of markets where income growth has outpaced the erosion of buying power from higher mortgage rates, rising home prices mean that a smaller share of what's for sale is available," Hale said.
"Each of these three factors has contributed to the housing affordability challenge, and each is likely to be necessary to get the market out of this situation," she added.
What the country needs, according to Hale, is to see incomes continue to rise and mortgage rates soften—something that she expects to happen by the end of the year. "I don't expect to get back to pandemic-era low mortgage rates, but every tick lower will improve buying power for some," she said.
At the moment, the 30-year fixed-rate mortgage, the most popular form of home loan among Americans, is at 6.58 percent—near recent record highs despite recent declines.
Finally, according to Hale, the ongoing home price growth in the U.S. housing market will only ease when housing supply grows across the country, "especially in areas where it is most needed, which is currently in the Northeast and Midwest," she said.