AP
- In 2023, only 15.5% of homes were affordable for the typical household, per Redfin.
- That's down from 20.7% in 2022 and the lowest share ever for Redfin records going back to 2013.
- The total number of affordable homes for sale was down 40.9% from 2022.
This year was the least affordable year for the US housing market on record, based on Redfin data going back to 2013.
In 2023, 15.5% of homes were affordable for the typical US household. That dropped from 20.7% in 2022, and is down from 40% in 2019 before the pandemic buying boom.
The real estate group analyzed 97 of the most populous US metro areas. It determined affordability based on the estimated monthly mortgage payment being no more than 30% of the local county's median income.
Redfin
But it's not just the share of affordable housing that fell. At the same time, the total number of affordable options on the market tumbled from 596,135 in 2022 to 325,500 in 2023 — a 41% drop.
In part, the decline stems from a 21.2% drop in listings, according to Redfin. But stubbornly high mortgage rates and home prices made the listings that did come to market more expensive.
High mortgage rates in particular have kept current homeowners unwilling to move, which in turn has reduced the number of available homes on the market for prospective buyers.
That's boosted home prices and left house hunters competing for a limited number of options.
Still, Redfin senior economist Elijah de la Campa anticipates affordability to improve in 2024.
"Many of the factors that made 2023 the least affordable year for homebuying on record are easing," de la Campa said. "Mortgage rates are under 7% for the first time in months, home price growth is slowing as lower rates prompt more people to list their homes, and overall inflation continues to cool. We'll likely see a jump in home purchases in the new year as buyers take advantage of lower mortgage rates and more listings after the holidays."