The US needs 40 million more low-cost homes 

A recent study confirms that the U.S. has a housing supply issue with no quick solution: While housing stock looks healthy for higher-end homes, it's dreadful for lower-income and first-time homebuyers.

94 million Americans cannot afford a median home: The National Association of Home Builders recently released a report illustrating the housing affordability pyramid using data from the Census Bureau's 2023 American Community Survey. 

This year's pyramid indicates that 76.4 million U.S. households can only afford a home valued at under $300,000, but just 37.4 million homes are available at that price point — less than half the number needed.

While the median existing-home sale price was nearly $400,000 in February, according to NAR, the affordability pyramid shows that 70% of households, or 94 million Americans, cannot afford a $400,000 home.

Looking at the housing stock in that median range — homes valued between $300,000 and $500,000 — there are 13.2 million available units. That falls far short of the supply needed for the 29.4 million consumers who can only afford a home in that price range.

More supply at the upper end: For the 12.7 million households that can afford homes priced above $750,000, there is almost enough housing supply — just under 12 million units. And at the top of the pyramid, there is a surplus of housing: 1.5 million people can afford homes valued at more than $2 million, and there are 1.6 million units available.

"These imbalances show a shortage of affordable housing," said Na Zhao, an economist at the NAHB, in a blog post.

This report comes at a time when home prices continue to rise — albeit at a slower rate — and mortgage rates remain elevated. The typical homebuyer's monthly housing payment was $2,807 for the week ending March 23, according to a Redfin report. That's an all-time high for that report.