The affordability issue in housing has worsened significantly over the past six years, according to a new report by Realtor.com®.
In its April 2025 Housing Market Trends Report released Thursday, Realtor.com found the income sufficient to purchase a media-priced home rose 70.1% from $67,000 in 2019 to a notable $114,000 in 2025.
The raw income needed to make ends meet in high-end markets was even more pronounced, with the San Jose, California, metro leading the way for the highest median income needed in the country at $370,069. California metros littered the list of highest median incomes needed to afford a median-priced home, with Realtor.com also recently giving the state an “F” on its “report card” for affordability and homebuilding
The report also detailed the fact that inventory is beginning to recover, though not to the levels seen prior to the pandemic (2017 – 2019 timeframe). Active listings increased 30.6% year-over-year, according to Realtor.com’s data, though compared to April 2019, they were still down by 15.6%.
“Even with today’s affordability hurdles, meaningful changes in the market could give buyers a better shot at finding a home,” said Danielle Hale, chief economist at Realtor.com. “The number of homes for sale is rising in many markets, giving shoppers more choices than they’ve had in years.”
With the price of homes continuing to rise, a concurrent rise in mortgage rates may have priced some buyers out of the market. This could be reflected in a reversal in pending home sales on a yearly basis. From October to December last year, pending home sales were up on a yearly basis, most notably rising by 8.2% in November 2024.
Beginning in January, pending home sales turned negative on a year-over-year basis—a trend that continued for four months straight.
The Realtor.com report also found that sellers are more willing to make price reductions, with 18% of listings having that feature as of April 2025. Interestingly, price reductions also increased 3.5% since April 2019.
Hale noted that “sellers are becoming more flexible on pricing, underscored by the price reductions we’re seeing, and while higher mortgage rates are certainly weighing on demand, the silver lining is that the market is starting to rebalance. This could create opportunities for buyers who are prepared.”
Click here to read the full report.