Some of the most beautiful dreams of life in America, involve getting a good education, a good paying job, buying a house and raising a family. American prosperity has been a magnet to much of the world. Any side of the world, USA meant wealth and prosperity. Nothing signified the dream of a prosperous American life like owning your own home. It sends a statement: ” This is my country; this is my life and this is my home” It exudes joy and the pride of living and working in the USA. But that dream might be coming to a swift end as home affordability is pricing many individuals out of the market.
75% of homes on the market are too expensive for middle-income buyers
As market watching goes, that dream may be more difficult to reach with each passing year. A pulse check of the housing market shows some shadowing signs that cast doubt on whether this current season of generational change will be able to buy in.
The US housing market is so unaffordable, over 75% of homes on the market are too expensive for middle class buyers, according to a recent report from the National Association of Realtors and Realtor.com.
That’s largely due to the shortage of housing supply, which has hit middle income buyers the hardest. Thanks to elevated mortgage rates, the housing market is missing around 320,000 homes priced at or below $256,000 – the maximum price a middle-income buyer earning up to $75,000 can afford.
Of the 1.1 million listings on the market in April, middle-income buyers could only afford 23% of them, the report said. That’s less than half of what the group could afford five years ago, when around 50% of all listings on the market were considered affordable for that group.
Economists say housing inflation will soon fall
“Ongoing high housing costs and the scarcity of available homes continues to present budget challenges for many prospective buyers, and it’s likely keeping some buyers in the rental market or on the sidelines and delaying their purchase until conditions improve,” said Realtor.com® Chief Economist Danielle Hale. “Those who are able to overcome affordability constraints may be increasingly drawn to newly constructed homes or to the suburbs and beyond, both of which may offer buyers more realistic opportunities for homeownership in the near term.”
With that said it is important to note that the “scarcity” of homes is exacerbated by the competing forces of corporate ownership.
Big business is buying up homes and rates unparalleled in US history. Institutional investors became major players in the rental market. They promised to return profits to their investors and convenience to their tenants. In fact, a significant part of the few new homes that are being built in this economy is being built with the express intention of being rental property and not for sale.
It worked. Between 2011 and 2017, some of the world’s largest private-equity groups and hedge funds, as well as other large investors, spent a combined $36 billion on more than 200,000 homes in ailing markets across the country. In one Atlanta zip code, they bought almost 90 percent of the 7,500 homes sold between January 2011 and June 2012; today, institutional investors own at least one in five single-family rentals in some parts of the metro area, according to Dan Immergluck, a professor at the Urban Studies Institute at Georgia State University. Some of the nation’s hardest-hit housing markets were finally stabilized.
The median price of an American house has increased by 28 percent over the last two years, as pandemic-driven demand and long-term demographic changes send buyers into crazed bidding wars.
Might the fact that corporate investors snapped up 15 percent of U.S. homes for sale in the first quarter of this year have something to do with it? The Wall Street Journal reported in April 2021 that an investment firm won a bidding war to purchase an entire neighborhood worth of single-family homes in Conroe, Texas. 
Part of a cycle of stories drumming up panic over Wall Street’s increasing stake in residential real estate. Then came the backlash, as cool-headed analysts reassured us that big investors like BlackRock remain insignificant players in the housing market compared with regular old American families.
Blackstone is not the only player in the corporate housing rental market.
You’ll find Invitation Homes and Rich investors like Warren Buffett (left) and B.W. Hughes are buying up many of the single-family homes that have long sustained the US middle class. They along with Blackstone buy up high percentages of properties in America. Investment firms aren’t buying all the houses. But they are buying the most important ones.
The real danger here is not just a decline in the middle class but a removal of the middle class. Could it be that America of the not to distant future will be a place where the average worker will never own a place to call your own nor have generational wealth to pass down?
