Treasury Secretary Scott Bessent recently declared the K-shaped economy “over.” But new data shows the divide remains deeply entrenched in housing—showing up before a sale ever happens, in who is still shopping.
Despite fewer entry-level homes available than in 2019, views per property have fallen below their 2019 level, according to the latest Housing Alignment Report from Realtor.com®. If demand for cheaper homes had held steady, scarcer supply should have driven more attention to each listing.
Instead, Jiayi Xu, senior economist at Realtor.com and author of the report, describes an “exodus of entry-level demand.”
“The disproportionate supply growth in higher tiers combined with the exodus of entry-level demand indicates a market increasingly out of reach for price-sensitive buyers,” Xu says.
At the high end of the market, shoppers have been much harder to shake. Luxury inventory has grown significantly since 2019, giving buyers more homes to choose from. However, views per property remain roughly in line with their pre-pandemic pace.
Recent Realtor.com transaction data has already shown the split at closing: Sales below $200,000 fell 14.4% year over year through May, compared with a decline of just 0.6% for homes between $1 million and $2 million.
The new report catches that same divide earlier—not just in who closes, but in who remains engaged enough to keep looking.
‘That house may never even get a chance’
Five years ago, shoppers were disproportionately concentrated at the cheaper end of the market.
In 2021, homes below $370,000 accounted for 50% of listings on Realtor.com but attracted 54.2% of all views. Today, those figures almost perfectly match: Homes below $370,000 make up 42.2% of listings and receive 42.8% of views.
At first glance, it might seem like a sign of equilibrium after years of flux. But, Xu says, “surface-level balance masks K-shaped market dynamics.”
Part of the reason is how the market got here to begin with.
The share of listings below $370,000 fell as inventory growth skewed toward middle- and higher-priced homes. Shopper traffic retreated even faster, and the share of views going to homes below $370,000 dropped 11.4 percentage points from 2021.
The affordability gap, meanwhile, remains vast. A household earning around $75,000 can afford only 23% of listings nationally. In a balanced market, 44% would be within reach, according to a separate Realtor.com and National Association of Realtors® analysis.
While inventory scarcity plays a starring role in that mismatch, so do home prices and mortgage rates. When today’s prices and rates are factored in, the income needed to qualify for a starter home has jumped from roughly $43,000 in 2019 to $78,000 today.
Gary Lanham, a broker associate with LoKation Real Estate in South Florida, says buyers are making those calculations much earlier than they used to.
“I also see buyers eliminating homes much earlier in the process,” Lanham says. “They are sitting at home doing the math before they ever call their agent to schedule a showing. If the monthly numbers do not work, that house may never even get a chance.”
Renting may be giving prospective buyers another reason to wait. In July, renting a starter home was cheaper than buying one in the 50 largest metros, saving renters an average $858 per month.
‘Is this house worth it?’ vs. ‘Can I make the payment work?’
But the top of the market tells an entirely different story.
Luxury inventory has grown significantly since 2019. But despite that larger pool of homes, views per luxury property remain roughly level with 2019, even as engagement at the entry level has slipped below its pre-pandemic mark.
That may reflect the many advantages that those who can afford to play in this price bracket bring to the market. For one, they’re far less sensitive to fluctuating mortgage rates.
More than 40% of homes sold for over $1 million from January through April were purchased with cash, according to a Realtor.com analysis of cash sales. At $2 million and above, a majority of purchases were all-cash.
But Libby McKinney Tritschler, a real estate agent with William Raveis in Fairfield County, CT, says it’s also about the amount of risk these buyers can take on.
“The dividing line isn’t necessarily simply rich versus poor. It’s buyers with financial flexibility versus buyers without it,” she says.
“One is asking, ‘Is this house worth that price?’ while the other is asking, ‘Can I make the monthly payment work?’” Tritschler says. “That’s a huge difference.”
And that split is a near-perfect picture of the K-shaped economy in practice: One segment stalls while the other keeps climbing.
A balanced market doesn’t mean a healthy one
Even as the market splits by buyers’ financial firepower, several topline measures suggest housing is finally moving back toward balance.
In June 2022, the median listing price stood $39,000 above the median price of homes shoppers were viewing on Realtor.com. By July 2026, that gap had shrunk to less than $4,000: The median listing price was $428,950, while the median price across viewed homes was $425,000.
Sellers did much of the moving. The median list price fell 2.4% over the past year, while the median price of homes attracting views stayed at $425,000.
The mix of listings and shopper attention has also come into much closer alignment. Five years ago, lower-priced homes drew a larger share of views than their share of inventory. Today, the two are nearly identical.
But, “while the balance is real, it does not signal a healthy market,” Xu says.
For a healthy balance to return, she says, more affordable homes would need to come to market to meet persistent lower-end demand—not price-sensitive shoppers exiting until supply and demand appear aligned.
That is what makes housing a notable exception to Bessent’s claim that the K-shaped economy is ending.
His case rests on signs that lower-income households are catching up. Bank of America found their after-tax wages rose 5.2% year over year in July, compared with 4.2% for higher-income households. Meanwhile, PNC found the spending-growth gap between its highest- and lowest-income customers had narrowed to just 0.1 percentage point.
Housing is moving toward balance in a very different way. At the entry level, buyers are not catching up with the market—more of them appear to be abandoning it.
