Six U.S. metro areas experienced a rise in homebuying power compared to 2019, defying a broader national trend that continues to limit the purchasing ability of typical households.
Cleveland led this group, posting a 4.4% improvement in buying power and seeing target home prices rise by $11,000. Half of the city’s housing inventory is now accessible to median-earning families. Pandemic boomtowns such as Phoenix, Tampa and Austin registered modest increases, along with Richmond and Indianapolis. Nevertheless, the share of homes affordable to median-income buyers in these locations remains below 2019 levels, underscoring ongoing affordability constraints.
The August 2025 buying power report from Realtor.com details how, on average, the gap between household income and home prices has widened in most major markets. Despite a 15.7% wage increase since 2019, median-income families can now only comfortably afford homes priced $30,000 lower than six years ago. In 2019, the median household could secure a $320,000 fixed-rate loan to purchase a $325,000 home, but that figure has dropped to $298,000 today, given the benchmark that mortgage payments should not exceed 30% of household income.
The typical listing price now stands at $439,450, requiring a 28% downpayment to secure what would have previously been a fully mortgage-backed purchase. With mortgage rates averaging 6.75% in July, monthly payments for a fixed-rate loan have increased by $600 over 2019 levels, amounting to an additional $7,200 per year in housing costs.
“Even as incomes grow, higher interest rates have eroded the real-world purchasing power of the typical American household,” Danielle Hale, chief economist at Realtor.com, analyzed. Only 28% of homes on the market are currently priced within reach of the average household.
The report also highlights several metropolitan areas where buying power declined most sharply in the six-year period. Milwaukee saw the steepest fall, with buying power down 10.5% and the price threshold for an affordable home decreasing $33,000, to $281,000, representing 28.3% of the market’s inventory. Houston, Baltimore, metro New York and Kansas City each posted declines of roughly 9%, with only 13.1% of New York inventory considered affordable to the typical buyer.
These shifts are reshaping buyer behavior, forcing many households to compete for a narrowing selection of affordable homes, consider rentals, or abandon hopes of homeownership altogether. Sellers, in turn, face new challenges and may need to adjust expectations or brace for longer listing periods.
Restoring buying power, the report concludes, will likely require a combination of lower mortgage rates, continued wage growth, and—most crucially—an expansion in housing supply, particularly within the affordable segment. Until those conditions improve, prospective buyers are expected to continue navigating the market with greater flexibility and strategic caution.
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