After two brutal years in the housing market, hopes were high that 2026 would see a gradual rebound. But those hopes haven’t materialized as potential buyers see misalignment between their incomes and active home listings, according to a new report from the National Association of Realtors® (NAR).
As of March 2026, 74.9% of U.S. listings matched the income distribution of typical households, up from 66.7% a year ago but notably below the pre-pandemic level of 84.4%, according to NAR’s May 2026 Housing Mismatch Report. This means the typical household can access just three-quarters of the housing opportunities that would exist in a balanced market, NAR said.
“Rising inventory has not translated into stronger sales because a significant share of that inventory does not align with the financial capacity of today’s buyers,” the report states. “Transaction activity remains subdued, and existing-home sales continue to operate at about 76% of pre-pandemic activity.”
There’s nowhere this gulf is more apparent than in the middle of the market, among lower- and middle-income households earning $75,000. These households are still seeing limited inventory of listings within their price range, up to about $261,140.
Homes in this price point account for less than one quarter (23%) of listings in the U.S., compared to 44% in a balance market. That’s a shortage of about 311,000 listings these middle-income buyers could afford, NAR revealed.
Lower-income households earning $50,000 face even more limited options, with access to only 9% of affordable listings nationally.
Midwest offers most opportunity, coastal markets lock buyers out
All the headline elements for a more balanced market—increased inventory, softening home prices, rising incomes and stable (yet still elevated) mortgage rates—haven’t translated into more home sales. This is particularly true in the nation’s high-cost coastal and Mountain West markets.
Los Angeles notches a 39.4% score, meaning a median-income household there can access fewer than one in 10 listings that would be available under balanced conditions. San Diego (45%); Oxnard, California (46.8%); Providence, Rhode Island (50.5%); and Boise City, Idaho (53.2%) round out the bottom five.
Overall, 11% of the nation’s largest 100 metros fall below the 60% severe listings shortage threshold, NAR found.
At the opposite end, only 13 metros have reached or exceeded the balanced-market threshold of 90% alignment, and all of them are in the Midwest or South. Toledo, Ohio, leads the nation at 107.4%, followed by St. Louis at 106%; Akron, Ohio, at 105%; Pittsburgh at 102.6%; and Detroit at 102.4%.
Signs of progress (with one outlier)
Still, nearly every major market is heading in the right direction, even if progress is slow. In fact, 99 of the 100 largest metros held steady or improved year-over-year, with Sun Belt markets that experienced pandemic-era moving booms and price spikes posting some of the biggest gains.
Lakeland, Florida, led all metros with an 18.3 percentage point improvement, followed by McAllen, Texas, and Las Vegas. Many of these markets saw a surge in new construction in recent years, keeping home prices more in line with local incomes, NAR reported.
The lone exception was Madison, Wisconsin, where the alignment score dipped 7.7 points to 63.1%, mostly due to strong demand, population growth and inventory not keeping pace with rising prices.
What it means for the industry
As NAR’s research shows, the housing recovery is strained with uneven results across geographies and price points.
While everyone in the industry has long beat the drum of adding more new inventory, the alignment scores reveal that’s not the whole story. Policymakers should focus on incentivizing new housing supply at affordable price points that match local incomes to drive more home sales and reignite buyer demand, NAR concludes.
For real estate professionals, the scores offer a window into a localized benchmark that helps you better assess (and explain) pricing conditions beyond headline inventory or available months of supply. Even if your market sees a jump in new construction (or existing homes come online) but has a low or falling alignment score, home sales are unlikely to bounce back in a meaningful way.
