Nearly 7 out of 10 Households Can’t Afford a New Median-Priced Home

Economics
Published

Rising home prices and interest rates are taking a terrible toll on housing affordability, with 87.5 million households — or roughly 69% of all U.S. households — unable to afford a new median priced home. In other words, seven out of 10 households lack the income to qualify for a mortgage under standard underwriting criteria.

The underwriting criterion used to determine affordability is that the sum of mortgage payments, property taxes, home owners and private mortgage insurance premiums (PITI) during the first year is no more than 28% of the household’s income.

Key assumptions include a 10% down payment, a 30-year fixed rate mortgage at an interest rate of 3.5%, and an annual premium starting at 73 basis points for private mortgage insurance.

These staggering statistics are part of NAHB’s recently released 2022 priced-out estimates, which further show that if the median new home price goes up by $1,000, an additional 117,932 households would be priced out of the market. These 117,932 households would qualify for the mortgage before the price increase, but not afterward.

Among all the states, California registered the largest number of households that would be priced out of the market. A $1,000 price increase would push 12,411 households out of the market in the Golden State, followed by Texas (11,108), and Florida (6,931).

It should be noted that these are the country’s three most populous states. The metropolitan area with the largest priced out effect, in terms of absolute numbers, is New York-Newark-Jersey City, N.Y.-N.J.-Pa., where 4,734 households would be squeezed out of the market for a new media-priced if the price increases by $1,000.

NAHB economist Na Zhao provides more analysis in this Eye on Housing blog post.

More details, including priced out estimates for every state and over 300 metropolitan areas, and a description of the underlying methodology, are available in the full study.

Subscribe to NAHBNow

Log in or create account to subscribe to notifications of new posts.

Log in to subscribe

Latest from NAHBNow

Economics

Sep 24, 2025

New Home Sales Post Unexpected Large Gain in August

Sales of newly built single-family homes jumped 20.5% higher in August, to a seasonally adjusted annual rate of 800,000 from an upwardly revised reading in July, according to newly released data from the U.S. Department of Housing and Urban Development and the U.S. Census Bureau. The pace of new home sales is up 15.4% from a year earlier. The three-month moving average of new home sales was 713,000, an increase from the 656,000 in July. New home sales remain down 1.4% on a year-to-date basis.

Membership | Legal

Sep 23, 2025

NAHB Members: Join the Housing Industry’s Attorney Network

Doing business with fellow members is a core value of the NAHB Federation. To strengthen that commitment, NAHB is building a network of attorney members to assist peers with legal issues.

View all

Latest Economic News

Economics

Sep 24, 2025

Single-Family Construction Loan Volume Falls Back

The NAHB Land Acquisition, Development and Construction (AD&C) loan survey in the second quarter reported tightening credit conditions for builders. Consequently, FDIC data reporting the outstanding volume of 1-4 family construction loans fell in the second quarter.

Economics

Sep 23, 2025

Beyond the Official Unemployment Rate: A Deep Dive into U.S. Unemployment

In August, the official, or standardly referenced, unemployment rate rose slightly to 4.3%, up from 4.2% in July. This marks the highest level in nearly four years, though it remains historically low.

Economics

Sep 22, 2025

Single-Family Homes Are Built Faster in 2024

Building a new single-family home took less time in 2024 compared to the previous two years. On average, it now takes 9.1 months from start to finish.