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Since 2012, US homebuyers in some of the largest metro areas earning the median household income have been priced out of their housing markets. National wage growth has been lagging while home prices have been steadily rising, widening the housing affordability gap.

The widening affordability gap has been especially hard on minorities, virtually pricing them out of some markets, according to a report released earlier this week by the brokerage Redfin.

Home prices in 30 of the country’s largest metros have risen nearly 30 percent since 2012, when the housing market “bottomed out.” Meanwhile, the median national household income has risen 1.6 percent over the same time, making homeownership more difficult for many middle-class Americans.

To put it in perspective, a household earning the median annual salary could afford 44 percent of the homes for sale in 2012, while the same household would only be able to afford 32 percent of available homes in 2016.

At the same time, the number of homes for sale has decreased nationally by 6 percent, with construction of starter homes not keeping pace with demand, says Redfin.

The percentage of affordable homes in the country’s 30 largest metros decreased by about the same amount for white, African-American and Hispanic families from 2012 to 2016. But, since minorities already have a lower rate of homeownership, the decrease virtually priced them out of several major markets.

In 2016, some 18 percent of homes for sale were affordable to Hispanic families earning the median income, while 14 percent were affordable for African-American families earning the median income. Both rates were 11 percentage points lower than they had been in 2012.

Comparatively, 30 percent of available homes were affordable to those white households earning the median income in 2016, down 12 percent from 2012.

Lack of affordable housing for African-American and Hispanic families earning the median income is the most severe in several metros on the West Coast. In Denver, CO, Los Angeles, CA, Portland, OR, San Francisco, CA, San Diego, CA and Phoenix, AZ less than 5 percent of homes for sale are affordable for African-American and Hispanic families earning the median income, says Redfin.

But there are ways to help lessen the gap, like more aggressive action by the federal government to help influence neighborhood policy. For example, the federal government can offer incentives to entice neighborhoods to vote for “inclusionary zoning practices by offering them infrastructure investments to improve the neighborhoods.” That way, more higher-density, affordable housing can be built in neighborhoods.

Also, restructuring the Mortgage Interest Deduction (MID) to limit the deduction to just primary residences and the number of mortgages on which a homeowner could deduct interest could help support middle-class homeowners who might be struggling to afford their homes, lessening the affordability gap.

“With policy changes like these, the US can turn the tides on housing affordability for everyone, while keeping our cities both economically and racially diverse,” Redfin says.

Click here to read the entire report.

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