Two in three renters cannot afford to buy a home; one in two renters pay more than 30 percent of their income for rent due to rising rental costs.

And it’s getting worse. Home prices continue to rise to record highs, eroding affordability even further. Since 2019, home prices rose nearly 30 percent. As a result, a typical home is about $80,000 more expensive than pre-pandemic. Wages may have also increased but not anywhere near the pace of the home prices. This means that potential buyers need to spend more of their budget on housing in order to buy the typical home now compared to 2019.

Meanwhile, inventory of homes for sale dropped significantly in the last couple of years, reaching record lows in 2021. In fact, there was a housing shortage even before the pandemic hit in 2020. There are currently only around 1 million units available for sale compared to near 4 million homes available for sale in 20071. This translates to fewer options for homebuyers leading to multiple offers and competition in the housing market.