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The real estate industry is expecting homebuilders, with the aid of local governments, to add more financially attainable starter homes to the market and ease burdens for buyers, according to Redfin.
Despite growth in the number of houses for sale, fewer are affordable to average households as prices and mortgage rates continue to rise.
“Homeownership is increasingly out of reach for the typical American. Over the last few years builders have focused on luxury homes, and there hasn’t been enough construction of affordable starter homes,” Daryl Fairweather, Redfin’s chief economist, said in a press release.
“We expect builders to shift their attention to more affordable homes during 2019, which along with rezoning efforts by local governments should reduce this pressure to some degree over time,” he added.
The share of homes for sale that were affordable to median income households fell between 2017 and 2018 in all 49 analyzed metropolitan areas of a Redfin report.
Of all cities, San Jose, Calif., saw the greatest drop in the percentage of homes affordable to average earners; only 14% of properties on the market were affordable to households with the city’s median income of $117,000, marking a considerable decline from 2017 when this figure was 26%.
Seattle saw the second largest decrease in the share of affordable houses for sale, with the figure dropping from 58% in 2017 to 46% in 2018.
Still, some cities, like Hartford, Conn., Jacksonville, Fla., and Nashville, Tenn., did experience growth in affordable homes on the market, with shares growing 19%, 9% and 4%, respectively.