Housing market still out of alignment despite affordability gains 

Despite recent signs of improvement, most housing markets still have a long way to go in resolving the mismatch between how homes are priced and what buyers can actually afford.

A joint report released today by the National Association of Realtors and Realtor.com found that their new Listing-Income Alignment Score — which compares home listings in a given market to that area's income distribution — reached 74.9% nationally in March, up from 66.7% a year earlier but still well below the pre-pandemic baseline of 84.4%.

A 100% score would mean that listings are distributed proportionally across all income levels. Lower scores indicate homes are skewed toward higher price points, leaving fewer options for first-time and middle-income buyers. A score of 75%, for example, means that households of varying income levels within a given market can access three-quarters of what's available, while one-quarter of all listings in the area are out of reach.

Using the alignment tool to assess previous years, the score was typically in the 85% to 91% range from 2016 to 2021. As inventory shrank and mortgage rates climbed, the score plunged to 57.4% in March 2023 — and didn't start rising substantially until the past year.

Where markets are most aligned: The Midwest tends to have the most aligned markets while coastal cities have severe shortages at many income levels, the report noted. 

Among the markets studied, Toledo, Ohio, was best aligned. While there are shortages in the area for buyers who make less than $25,000 a year, the market is balanced for any household making more than $35,000 annually. Those who make $100,000 a year have access to about 72% of all local listings.

With an alignment score of 39.4%, Los Angeles is the market most out of alignment with a shortage of listings at every income bracket below $500,000. Buyers would need to make $100,000 a year to have access to just 4% of local listings.

Big gains in areas with improving inventory: Markets with substantial inventory growth tended to be among those most improved over the past year. Lakeland, Florida, topped the list, followed by McAllen, Texas, and Las Vegas.

Over the past seven years, Honolulu posted the largest improvement, followed by Bridgeport, Connecticut, and San Jose, California.

Prices 'preventing home sales from reaching pre-pandemic levels': Twenty markets were considered well aligned seven years ago based on the NAR/Realtor.com tool. That dropped to just one market in March 2025 before ticking up to seven this year.

Though March's data shows an improvement compared to last spring, the U.S. continues to face a structural mismatch between what's for sale and what people can afford, according to Nadia Evangelou, director of real estate research at NAR. The mismatch remains significant even with inventory growing.

"Too much of the inventory available today remains concentrated at higher price points, leaving a shortage of options for entry-level and middle-income buyers. This is preventing home sales from reaching pre-pandemic levels," Evangelou said.

To achieve a balanced market nationally, the report estimates that the U.S. needs around 311,000 more homes listed for under $261,000 — the ceiling of listing prices accessible to middle-income households.

"Until the supply of entry-level and middle-market homes grows to meet demand, many buyers will continue to find the market out of reach despite headline improvements in affordability and inventory," said Danielle Hale, chief economist at Realtor.com.