Home Prices Are Rising In America

Low inventory is taking a toll on the affordability of all home segments, but especially starter homes. At the bottom of the housing market in 2012, starter homes were nearly affordable, primarily because starter prices were discounted: homebuyers needed only to shell out 32.2% of their income to buy the median priced starter home. Now, starter homebuyers would need to dedicate 37.7% of their income – a 5.6 percentage point increase.