It's becoming harder to get started on the American Dream of homeownership.
Some eight years after its worst collapse since the Great Depression, the housing market has recovered in much of the country, with prices approaching peak levels set a decade ago.
But the supply of affordable houses available for first-time buyers remains tight, leaving many on the sidelines.
That shortage is worsening, according to real estate site Trulia.
Researchers there say the number of affordable homes on the market for the average first-time homebuyers this year took its biggest year-over-year drop in three years, falling 12.1 percent. The good news for younger home shoppers is that wages have begun rising after a long, flat spell following the Great Recession.
Though incomes are up, home prices have been rising even faster in many cities. That's pricing out more households looking to get started as homeowners.
To afford the median-priced starter home, first-time buyers, on average, now have to pay some 39 percent of their monthly income — up 2 percent in three years. But mortgage lenders have held the line on strict credit and income standards when they approve a mortgage. As a result, there's a squeeze on the supply of starter homes.
Households moving up to a larger home have it a lot easier, Trulia found. A buyer of a so-called "trade-up" home needs just 25.5 percent of their monthly income. Buyers at the upper end need just 14 percent of monthly income to afford a premium home, according to Trulia's data.
Those national averages mask a wide range of market conditions.
For first-time buyers, for example, the supply of affordable houses varies widely from one part of the country to another.
If you're looking for a good place to settle down and buy a starter home, you can scratch San Francisco off the list.
In the priciest market in the U.S., the median-priced starter home there costs more than the local median income, according to the latest data from real estate site Trulia.
Starter homes remain much more affordable, on the other hand, in much of the South and Midwest.
In roughly half of the top 100 cities in Trulia's analysis, first-time buyers with 33 percent of the local median income could afford to buy the median-priced starter home.
Clear here for how the 100 Cities compare
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