Welcome to the typical home for sale in the US right now. It costs $365,000 and is probably too expensive for someone seeking the middle class American Dream.

A real estate professional talks to potential homebuyers.

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• In January, the median home sale price reached an all-time high of $365,000.
• That's likely more than the original asking price, and many houses stay on the market for just one week.
• It all adds up to an American Dream that's becoming more elusive for the US middle class.

If you're looking to buy a home in the US right now, let's hope you have patience and a savings account with several zeros. 

January was the most competitive in housing history, according to a new report for real estate database Redfin, as buyers outnumbered sellers and mortgage rates rose. To make matters worse, home builders can't find basic materials like lumber or steel, which is delaying the construction of 5.24 million homes now needed to meet the demand of this year's buyers.

The median home sale price spiked 16% year-over-year that month to an all-time high of $365,000, according to Redfin's calculations. During the month, inflation also reached a 40-year high, making homebuying increasingly unaffordable. 

"When there are more buyers than there are sellers, competition heats up," Daryl Fairweather, Redfin chief economist, told Insider. "And the winners end up being experienced homebuyers and investors." She notes that with so many homes selling in record time, buyers with limited financial resources will lose out big.

Here's what the typical home for sale in the US looks like right now.

The sale price of the median home in the US hit an all-time high of $365,000 in January.

Family in front of suburban home.

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Home prices have steadily been growing since the 1950s, however recent gains are attributed to supply chain concerns stemming from the COVID-19 pandemic, and not enough homes built over the past few decades to meet demand.

In 2019, prior to the onset of the pandemic, the median home sale price was $285,900 during the month of January. By 2020 and 2021, the price had climbed to a median of $306,400 and $314,655, according to Redfin. 

Now, the median home sale price spiked 16% year-over-year in early January to an all-time high of $365,000, according to Redfin's calculations. During the month, inflation also reached a 40-year high, making homebuying increasingly unaffordable. 

And that sales price is typically higher than the original asking price.

Couple talking to financial advisor.

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Negotiating for the best price — typically lower than the home is listed for — is a rule of thumb for homebuyers. But when there aren't enough homes being sold to meet demand, buyers start offering more.

In early January, 41% of homes sold above list price, meaning buyers were willing to pay over asking price in attempt to seal the deal. 

Homes are selling at a faster pace and for a lot more than asking price. Low to moderate income buyers are being outbid by their wealthy counterparts, further pushing homeownership out of their reach. 

"The conditions are becoming increasingly challenging for first-time homebuyers, who will have to compete against more experienced buyers who are willing to do whatever it takes to win." Fairweather said. 

Despite high prices, the typical home will likely have an accepted offer within one week of hitting the market.

Realtor talking to a family.

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As the amount of homes available for sale remains at historic lows, homebuyers are quick to make their move — even in the dead of winter.

"The housing market is seeing an unprecedented level of intensity because supply is at a historic low," Fairweather told Insider. "Sellers seem to be waiting for spring to list their homes, but there are still plenty of buyers out there, many of which have been looking for a long time and are desperate to end their search."

For these reasons, homes are not spending much time on the market, despite historic high prices. 29% of homes that went under contract had an accepted offer within one week of hitting the market.

After pandemic-era near-zero rate, the interest on the mortgage you'll need to buy the typical home is about to go up.

The Federal Reserve building.

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In order to encourage spending during the economic turmoil of the pandemic, the US Federal Reserve lowered interest rates on mortgages to the lowest they've been in decades.

But that party is over as the Fed has announced it will start raising rates in March.

"Buyers are pouring into the market to claim a home before mortgage rates rise further as new listings slow to a trickle," Fairweather told Insider. 

Following a month-long rise, mortgage rates were stagnant in the last week of January, coming in at 3.55%, according to Freddie Mac. However, the organization expects them to rise further in 2022. As rates increase and buyers compete for the limited number of available homes, competition will heat up, likely pricing out many low to moderate income buyers. 

The typical homes for sale in the US are increasingly out of reach for the middle class.

A young couple looking at a home.

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While home prices will continue to rise in 2022, wage growth is likely to slow, meaning housing affordability could get even further out of reach for many buyers — especially the middle class.

In the fourth quarter of 2021, the average price of a single-family home in the majority of US counties was less affordable compared to historical numbers, the property database ATTOM said. The decline in available homes for sale paired with increased competition amongst buyers means that income will play a larger role in homeownership.

"We expect the narrative around housing this year to shift from one of extremely limited inventories leading to hypercompetitive bidding wars to one in which increasingly more would-be homebuyers are priced out of the market," researchers wrote.

The COVID-19 pandemic has stalled growth in the American middle class as the demographic has experienced significant job losses. Pew research found that in 2020, 54 million fewer people encompassed the global middle class, while the number of poor is estimated to have risen 131 million higher because of the recession. The uptick in poverty means less people have the funds to afford housing.

"Higher wages from the tight labor market should help more people afford homeownership, but unfortunately because of the lack of housing inventory it will also increase competition and drive up prices further," Fairweather said. 

Buying a home is typically a major decision, but because of rushed timelines and heated competition, first-time millennial homebuyers are likely to regret it.

Frustrated Millennial homebuyer.

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Millennial buyers are a large portion of the first-time buyer demographic. And new data shows they may end up regretting their decision to buy a home.

A survey by the real-estate education platform Clever Real Estate, that polled 1,000 people about their home buying plans, indicates that of the millennial respondents who already owned a home, 82% admitted to having at least one notable regret about their home purchase, most notably its location and the rushed timeline to buy. 

Millennials are more likely to buy fixer-uppers, which are more affordable. But even if they do luck out on a deal, the purchase may become a regret. 

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