First-time buyers are at risk of falling behind in the housing market as home prices and mortgages continue a seemingly uninterrupted climb to new heights as incomes fail to keep up.

The housing market has been heating up in the last year as the median price for homes has grown steadily with higher mortgage payments following not far behind. According to a study from the Federal Reserve Bank of Atlanta, a median-income household would now need to spend more than 32% of its annual income to afford a median-priced home which slightly eclipses the 30% affordability benchmark used by the U.S. government.

Homeowners have to pay almost $1,800 a month to cover their mortgage, property taxes and insurance for a median-priced home, $300 more than the same time last year, according to the Atlanta Fed. Meanwhile, the median home price in July was found to be $342,000 versus $279,000 only a year earlier.

These figures arrive at a time of a contracting housing market that is struggling from growing prices and limited supply. During the COVID-19 pandemic, prices for homebuilding rose because of disruptions in the supply chain for construction materials and a labor shortage that was exasperated by the virus’ spread. A drop in interest rates has also pushed down borrowing costs, but increased demand for homes further.

As these woes eased somewhat, affordability continues to put a damper on any enthusiasm about the housing market’s recovery, especially as income growth continues to lag behind that of housing prices.

First-time buyers and minorities are the ones who are squeezed the most by the current market because they often lack the means to either afford a mortgage or hold pre-existing equity that would let them purchase a home today.

Millennials, those born from 1981 to 1996, struggle more than their parents and grandparents in becoming homeowners. Even if there is unmet demand for homes, members of the generation are generally more pessimistic about any possibility that they will ever own one and COVID-19 has heightened this sentiment further.

For nonwhite Americans, the racial wealth gap already played a role in limiting their participation in the market but it is at risk of becoming more acute in the event they lose their home or prices continue to grow unabated.

It is estimated that 45% of Black Americans own homes, a 5% decrease since a peak in 2004. White Americans, in comparison, are more likely to own their home and current homeowners are usually better equipped to buy a new home, especially as home values appreciate through the pandemic.