Median Home Prices Now Exclude First-Time Buyers With Six-Figure Incomes, Says 25-Year Industry Veteran

Written by:

Rudi Davis

Date:

08 Dec 2025

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The residential real estate market is facing an affordability crisis that is not simply the result of temporary interest rate hikes, according to Joseph Bograd, a team leader at Bograd Team with 25 years of experience in Pennsylvania, New Jersey, and Florida. Bograd argues that the financial calculations that once allowed middle-class buyers to purchase homes no longer add up.

“The median sale price is not what it used to be, and it’s definitely priced some buyers out of the market,” Bograd says. “The median sale price used to be $250,000 or $350,000, which was affordable. Buyers could put 20% down – $65,000 to $80,000 – and finance $250,000 to $300,000 over 30 years, with a payment of $2,100 to $2,500 a month.”

Bograd explains that this was manageable for households earning $75,000 to $100,000 annually. Today, that balance between income and housing costs has broken down, and he believes the change may be permanent.

The Six-Figure Income Problem

Bograd describes a new reality for buyers: “Now $100,000 unfortunately doesn’t get you much. After you put 20% down and start budgeting for taxes, insurance, everyday expenses, credit cards, landscaping, heating, electric bills, you’re barely able to save a few thousand dollars a month for your kids’ college or a yearly vacation.”

He points out that households with six-figure incomes – once considered comfortably middle class – are now being priced out of homeownership in many areas. This, he insists, is not due to poor financial planning but to a fundamental gap between rising home prices and stagnant incomes.

“It’s a scary time, and I think that’s why people are nervous about buying right now – because it’s become unaffordable,” Bograd says. “That’s definitely softened things for first-time homebuyers.”

The Bifurcated Market

Bograd sees the market splitting into two distinct segments. First-time and middle-tier buyers are struggling with affordability, while luxury buyers are largely unaffected.

“The higher-end listings are selling faster than the mid-tier listings,” Bograd notes. He cites recent cash deals for a $9 million unit at the Bentley and a $5 million penthouse. “Those buyers aren’t affected by what’s going on with interest rates or the broader economy.”

This creates two separate markets with little overlap. “It’s like a bubble for them,” Bograd says of luxury buyers, “because they don’t have to deal with what the rest of the country is facing.”

In contrast, the middle market is seeing buyers who would have qualified five years ago now unable to make the numbers work, even with steady jobs and moderate debt.

Industry Focus on the Wrong Issues

Bograd believes much of the industry’s attention is misplaced. “The industry conversation has focused heavily on interest rates, inventory levels, and commission structures,” he says, but argues these are not the main barriers for most buyers.

He contends that the real issue is a structural mismatch between income levels and housing costs. “This isn’t a temporary market condition—it’s a permanent change in the relationship between what people earn and what homes cost,” Bograd says. Agents and brokers who understand this will need to rethink which buyer segments are still viable and how to serve them.

Adapting to the New Reality

To address these challenges, the Bograd Team has expanded into markets with better affordability. Bograd says Florida currently offers more opportunities for buyers than Pennsylvania or New Jersey, despite its own issues with insurance costs and inventory.

“For buyers right now, Florida, without a doubt,” Bograd says when asked which of his three markets holds the most promise. “The market there has softened a bit, so if you’re looking to buy something in Florida, there’s some opportunity right now.”

Whether the real estate industry can develop new strategies – such as alternative financing, different property types, or shifting to more affordable regions – to serve buyers priced out of traditional homeownership will shape transaction volumes over the next decade. As Bograd’s experience shows, the definition of “affordable” has changed, and so must the industry’s approach to serving today’s buyers.