As 2021 closes out, it’s time to start looking ahead to 2023. And if there’s one thing the 2023 housing market is likely to bring, it’s bad news. A recent report by research firm RealtyTrac has found that nearly all of the homes listed for sale in 2023 will be unaffordable to most people.
The report states that in 2023 the average sale price of a home in the U.S. will be around $383,000. That’s an increase of 22.7% from 2021’s average sale price of $312,500. The findings paint a worrying picture for potential home buyers in the coming years.
According to the report, over two-thirds (67.5%) of homes listed for sale in 2023 will be unaffordable to those earning the median family income in the U.S. In 2021, the median family income was $78,400. To realistically purchase an average-priced home, a buyer would need to make around $133,000. This would represent a jump of 69.6% from 2021’s median family income.
The report also stated that in 2021 the median home sale price in the U.S. had surpassed its pre-recession peak of $320,400, which was reached in 2008. Since then, prices have been rising at a rate of over 2.7% annually.
The reasons for the price hikes remain unclear, but the most commonly cited include limited housing supply and rising demand from young buyers. Interest rate hikes and higher labor costs have also been blamed for the unprecedented price growth.
The news is a sobering reminder of the rapidly changing landscape of the U.S. housing market. Without major measures to increase affordability and reduce the cost of buying a home, many potential buyers may be forced to remain renters for the foreseeable future.