There are more homes for sale in many markets, as the inventory crunch is easing somewhat, but the share of those homes that are affordable to a typical household has decreased, according to a new report from Redfin.
The report, for example, found 14 percent of homes that were on the market in 2018 in the San Jose, Calif., metro area were affordable on the area’s median household income of $117,000. In 2017, 26 percent of homes for in San Jose were affordable by those same standards.
In Los Angeles, 16 percent of homes for sale were affordable in 2018, down from 20 percent in 2017, the report said. In Seattle the share of affordable homes for sale dropped from 58 percent in 2017 to 46 percent in 2018.
“Homeownership is increasingly out of reach for the typical American,” Redfin Chief Economist Daryl Fairweather said in a release accompanying the report. “Over the last few years builders have focused on luxury homes, and there hasn’t been enough construction of affordable starter homes.”
The share of homes for sale affordable on a median income fell from 2017 to 2018 in all 49 of the metro areas Redfin analyzed. However, the report found there were a few metro areas where the number of affordable homes for sale increased, including in Hartford, Conn. (+19 percent); Jacksonville, Fla. (+9 percent); and in Nashville (+4 percent).
“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,” Fairweather said.