In the U.S., the landscape for middle-class homebuyers has dramatically changed, revealing a troubling trend: homeownership is becoming less attainable. An NBC News analysis of Census Bureau data highlights that nearly 30% of middle-class families were spending over 30% of their income on mortgage payments in 2022—more than double the figure from 2013.
Experts emphasize that when housing costs consume such a significant portion of income, it leaves families with little room to cover everyday expenses or emergencies, reducing their chances for economic advancement.
This 30% threshold has long been the standard for assessing housing affordability, a metric we’ve relied on for decades as part of ongoing evaluations of housing costs.
Domonic Purviance, a housing expert at the Atlanta Federal Reserve, notes, “In the past, if you were in the middle class, you could afford a mid-priced home. That’s no longer the case.”
Haley and Ben Williams recently purchased their home in Elkhart, Indiana, for $265,000, located a two-hour drive from Chicago. They are acutely aware of the heavy financial burden they now bear: with a mortgage interest rate of 8.125%, which exceeds the national average of 7% near its two-decade high, they are only able to pay $176 toward the principal each month, with over $2,000 going towards interest, property taxes, and homeowners insurance.
This sacrifice was necessary for the Williamses, as starting a family would force them to continue renting a mold-infested apartment for $900 a month. The homes they could afford, priced below $250,000, sell quickly to cash buyers, leaving them with no choice but to purchase more expensive properties. In August 2024, in Elkhart—a city with a population of 60,000 and a median income of $67,000—families need to allocate 22% of their income to afford a mid-priced home worth $240,000. While this percentage is lower than the 30% threshold, it has nonetheless doubled compared to three years ago.
NBC News’ Homebuyer Index reveals that over 30% of counties across the U.S. are experiencing a price-to-income ratio that makes potential buyers feel “priced out.” As a result, many middle-class families are hesitant to enter the housing market.
In 2022, 49.7% of these hesitant families were still “biting the bullet” to buy a home, a marked decrease from 60.1% in 2010 when families felt ready to invest in real estate.
Daniel McCue, a senior researcher at Harvard University’s Joint Center for Housing Studies, attributes these challenges to record-breaking increases in home prices, compounded by rising property taxes and homeowners insurance costs, leaving homeowners struggling. Even though median household income rose by 50%—reaching $80,610 from 2013 to 2023—the growing pressure of interest rates remains a significant concern for many households.
