The U.S. housing market is finally flashing some positive economic signals for prospective buyers, but the shift is unlikely to provide immediate, broad-based relief for the middle class.

Wages are projected to grow by 3.4% in 2026, outpacing projected home price increases by 1.2 percentage points, according to a Friday report by Realtor.com, citing data from global advisory firm WTW released in February.

While this trend is beginning to tilt hundreds of markets back toward affordability, the gap between what U.S. residents earn and what they can afford in the housing market remains historically wide.

To understand the current strain, experts point to the home price-to-income ratio. According to Hannah Jones, senior economic research analyst at Realtor.com, this measure of homebuying affordability eased to roughly 4.9 in 2025, a modest improvement from its recent peak of 5.2 in 2022. However, the ratio remains well above the 2017 to 2019 level of 4.1.

The Realtor.com report highlights the massive leap required to fully restore market balance. Incomes would need to surge by roughly 20% to return to pre-pandemic affordability levels, assuming home prices stay completely flat. More striking still, incomes would have to jump by 58% to see the 3.1 home price-to-income ratio enjoyed by homebuyers in 1990.

As a result, wages may be rising in aggregate, but homeownership still remains elusive for most Americans. The WTW data generally tracks with research from other companies, including payroll processing firm ADP, which predicted a rise in wages in 2026, as well. 

And in a March 27 release, Deloitte also identified how “real wage growth” is strengthening, which gives consumers’ “spending an additional boost.” However, the authors of the report also concluded, “We expect wage growth to continue to moderate, albeit slowly, this year as persistent inflation and a dearth of low-paid immigrant workers put upward pressure on wages.”

This persistent affordability crunch is driven by a fundamental disconnect between how businesses and households view compensation. Lori Wisper, managing director at WTW, told Realtor.com that employers look at wages strictly as a labor market cost dictated by supply and demand. Households, conversely, measure their income by its actual buying power — what is left after inflation and heightened costs for essentials like food, energy and health care take their cut.

“The reason people confuse the two is because when you take the two together, it represents someone’s buying power,” she said, which Realtor.com’s researchers called “the real value of money.”

That buying power has been heavily eroded since 2021, when inflation began its steep climb to a high of 9.1% in June 2022, the largest increase in 40 years. Compounding the inflation squeeze is a severe lack of inventory. The U.S. currently faces a deficit of over 4 million homes, according to Realtor.com, a supply gap that continues to prop up high home prices even as wages slowly recover.

Comparing today’s landscape to historical norms illustrates the severe burden on modern buyers. Realtor.com data shows that in 1990, despite mortgage rates hovering between 9% and 10%, the median home price was just $96,800 against a median household income of $31,000. Today’s buyers are caught in a double-bind, facing both high property values relative to their incomes and elevated borrowing costs.

Ultimately, incremental wage growth alone will not solve the housing crisis. For affordability to recover in a way that feels durable for the average homebuyer, progress will need to materialize on multiple fronts simultaneously. As the Realtor.com analysis concludes, a true market reset requires wages to keep rising, mortgage rates to ease and home-price growth to soften enough for buyers to finally regain their lost ground.