Pyramid Illustrates Housing Affordability Crisis
NAHB has updated its "housing affordability pyramid" for 2023, and the latest data show that 64.8 million households out of a total of 132.5 million are unable to afford a $250,000 home.
The pyramid is based on conventional underwriting standards that assume the cost of a mortgage, property taxes and property insurance should not exceed 28% of household income. Based on this methodology, NAHB economists have calculated how many households have enough income to afford a home at various price thresholds.
At the base of the pyramid are 39 million U.S. households with insufficient incomes to be able to afford a $150,000 home.
The pyramid's second step consists of 25.8 million with enough income to afford a top price somewhere between $150,000 and $250,000. Adding up the bottom two rungs shows that there are 64.8 million households who cannot afford a $250,000 home.
The nationwide median price of a new single-family home is $425,786, meaning half of all new homes sold in the U.S. cost more than this figure and half cost less. A total of 96.5 million households — roughly 73% of all U.S. households — cannot afford this median-priced new home.
This helps put affordability concerns into perspective and goes a long way toward explaining why housing affordability now stands at a more than 10-year low.
The top of the pyramid shows that 9.7 million households have enough income to buy a $850,000 home (adding up the top three rungs), and 2.9 million even have enough for a home priced at $1.55 million. But market analysts should never focus on this to the exclusion of the wider steps that support the pyramid's base.
On March 2, NAHB released its new Priced-Out Estimates for 2023, which shows that a $1,000 increase in the price of a median-priced new home will price 140,436 U.S. households out of the market for the home.
Prospective home buyers also are adversely affected when interest rates rise. NAHB's priced-out estimates show that 1.28 million households are priced out of the market for a new median priced home at $425,786 when interest rates rise a quarter-point from 6.25% to 6.5%. An increase from 6.5% to 6.75% prices approximately 1.29 million households out of the market.
Latest from NAHBNow
Oct 23, 2025
IBS 2026 Exhibit Home Aims for Groundbreaking Energy-Efficiency RatingFor anyone curious about how far today’s innovative building products can take a home’s performance, The New American Home 2026 is the must-see showcase at the upcoming Builders’ Show, taking place Feb. 17–19.
Oct 22, 2025
NAHB Generates Enthusiasm for the Trades During the Big BuildNAHB recently introduced thousands of students to the skilled trades during The Big Build event at the National Building Museum in Washington, D.C.
Latest Economic News
Oct 20, 2025
Non-Conventional Financing for New Home Sales Loses Ground in 2024Nationwide, the share of non-conventional financing for new home sales accounted for 31% of the market per NAHB analysis of the 2024 Census Bureau Survey of Construction (SOC) data. This is 1.7 percentage point lower than the 2023 share of 32.4%. As in previous years, conventional financing dominated the market at 69.3% of sales, higher than the 2023 share of 67.6%.
Oct 17, 2025
Better Growth, Larger Deficits: CBO Fiscal OutlookThe Congressional Budget Office (CBO) is a key nonpartisan score keeper that measures the effects of policy changes by the Federal Government. With several policy changes since January of this year, including the One Big Beautiful Bill Act (OBBBA), stricter immigration, and higher tariffs, the CBO updated its economic projections through 2028.
Oct 16, 2025
Amid Market Challenges, Builder Expectations Rise in OctoberEven as builders continue to grapple with market and macroeconomic uncertainty, sentiment levels posted a solid gain in October as future sales expectations surpassed the 50-point breakeven mark for the first time since last January.