Middle-income households are priced in 77% of home listings

There are more homes for sale than there were at the worst point of the post-pandemic shortage, and price growth has slowed. But despite these key improvements, the market remains sluggish – a new analysis helps explain why.

The problem is according to the Housing Mismatch report Realtor.com® and the National Association of Realtors®, is that the recovery is not reaching the people most likely to restart the market.

Buyers making around $75,000 can only afford 23% of active listings nationwide. In a balanced market they would have access to about 44%. That difference equates to roughly 311,000 missing listings that are priced below their maximum purchase point, estimated at $261,000, according to the report.

Even those earning $100,000 can currently afford only 39% of listings, compared to 56% under balanced conditions – leaving a shortfall of 257,000 listings.

But he says it’s not all bad news Nadia Evangelou, NAR chief economist and director of real estate research.

“The housing supply is growing and affordability is improving,” she says. Nearly all major markets showed improvement over the past year, with 99 of the 100 largest metros posting gains or staying the same.

“However, the US housing market continues to face a structural mismatch between the homes for sale and what buyers can afford,” Evangelou adds. “Too much of the current inventory remains concentrated at higher price points, leaving a shortage of options for entry-level and middle-income buyers.”

It’s this mismatch that helps explain why home sales haven’t returned to pre-pandemic levels — and it could be the key takeaway for policymakers looking for solutions to America’s affordability problem.

A new way to measure the market

The report introduces the Listing-Income Alignment Score, a new metric that provides an important new framework for the way affordability is often discussed.

Inventory data can show whether more homes are coming onto the market. Affordability measurements can show whether buyers have gained or lost purchasing power. But neither fully answers the question that guides most buyers: What are my options?

Now the Listing-Income Alignment Score does just that, by measuring how well the distribution of home listings in a given market matches the income distribution of local households. A score of 100% means that offers are distributed proportionately across income levels, while a lower score means that the available offers do not match what local buyers can afford.

Nationally, the score was 74.9% in March 2026, up from 66.7% a year earlier, but still below the pre-pandemic 84.4%. However, locally, conditions vary considerably.

Of the 100 largest metropolitan areas, only seven are now considered well-matched – a significant improvement from 2025, when only one metro met that threshold. But it’s still far below 2019, when 20 metros did so.

The best-matched markets are concentrated in the Midwest and Upper South. Toledo, St. Louis, Akron, Pittsburgh and Detroit all exceed the 100% threshold, meaning the homes for sale are more in line with what local households can afford.

On the other hand, the eleven major metropolises are still in serious deficit, with an adaptation score of less than 60%. They include Los Angeles, San Diego, Oxnard, Providence and Boise. It’s an improvement from 2025, when 33 metros faced severe shortages, but still worse than 2019, when there were only seven metros.

Why a mismatch in listings and incomes is causing home sales to stall

That snapshot helps explain why home sales have remained below pre-pandemic levels 4.06 million homes sold in 2025compared to 5.34 million in 2019, for perspective.

“The data makes it clear that more inventory alone will not be enough to unlock the housing market,” explains Danielle Halechief economist at Realtor.com. “A real recovery requires housing at the right price.”

It all comes down to optionality – and a middle-income buyer’s journey through some of the country’s biggest metros shows why.

In Los Angeles, the most unbalanced market in the report, a household making $75,000 a year can pay for just 0.9% of advertising, compared to 37.8% in a balanced market. Even households earning $100,000 can only afford 4.1% of ads.

In such a market, more listings do not necessarily translate into more sales. If the new supply largely exceeds what middle-income buyers can afford, it won’t significantly expand the pool of people who can transact.

This mismatch is clearly at play in Los Angeles: Only buyers making $500,000 or more per year have access to the total number of listings they should be able to get in a balanced market. It provides an insight into why homes are technically available but still functionally unavailable to buyers who would normally boost the market.

In Toledo, however, our middle-income buyers are doing much better. A household with $75,000 per year has the ability to pay for 59.7% of advertising and at $100,000 per year 71.6% of advertising. Even high-income households retain access to a balanced share of listings.

This is not to say that Toledo is immune to others headwinds in the marketsuch as higher mortgage rates or cross-border economic uncertainty, but it does show how real options for buyers create real movement in sales. The Midwest and South (the regions with the best alignment on listing revenue) saw the largest year-over-year increases in pending home sales, according to to the most recent data from NAR.

As Hale puts it, “Until the supply of entry- and mid-market homes grows to meet demand, many buyers will continue to find the market out of reach, despite significant improvements in affordability and inventory.”

Housing recovery must reach the middle point

But the mismatch could have much broader consequences than just a drag on short-term sales.

Previous research from Realtor.com has shown that getting into the housing market early pays off over a lifetime. Buying a first home at age 30 is associated with a 22.5% higher net worth at age 50, or about $119,000 more for a typical midlife household, compared to buying at age 40.

That advantage can also apply to the next generation. Children who grew up in homeowner households are 18.4 percentage points more likely to become homeowners by age 35.

If the current shortage of affordable housing continues to price out middle- and middle-income buyers, it could shorten the period households have to build equity and accumulate the kind of housing wealth that often helps the next generation enter the housing market in that critical window.

The report makes clear that increased supply alone will not restore normal market activity if that supply does not keep pace with local incomes. The market needs more entry- and mid-market housing, especially in metro areas where low alignment scores show that supply is poorly aligned with what local households can afford.

Until that is the case, more and more listings can appear without leading to more sales. And more households willing to buy may continue to lose the thing that homeownership rewards most: time.