Currently Reading

60% of Households Cannot Afford New Median Priced Home

Advertisement
Affordability

60% of Households Cannot Afford New Median Priced Home


March 2, 2021
Man holding house keys
Photo: MailHamdi

Roughly 60% of households, or 75.1 million, cannot afford a new median priced home, according to new priced out estimates by the National Association of Home Builders. If new median home prices were to increase by another $1,000, it would price out 153,967 more households. Being unable to afford a new median priced home, according to NAHB, means incomes are insufficient to qualify for a mortgage under standard underwriting criteria. This criteria is the sum of mortgage payments, property taxes, homeowners and private mortgage insurance premiums during the first year, which should not exceed 28% of a household’s total income.

Key assumptions include a 10% down payment, a 30-year fixed rate mortgage at an interest rate of 2.8%, and an annual premium starting at 73 basis points for private mortgage insurance.

As usual, NAHB’s latest update includes priced out estimates for all states and metropolitan areas. The priced out numbers vary with both the sizes of the local population and the affordability of its new homes. Among all the states, Texas registered the largest number of households priced out of the market by a $1,000 increase in the median-priced home in the state (14,309), followed by California (12,361), and Florida (10,215), largely because these are the country’s three most populous states.

Read More
 

Related Stories

Housing Policy + Finance

Biden Proposes 15% Budget Increase for HUD Aimed at Affordable Housing

President Biden hopes to increase the U.S. Department of Housing and Urban Development’s budget by 15%, with funds aimed at boosting affordable…

Market Data + Trends

Affordability Remains Top Struggle for Buyers

Homebuyers are entering the most competitive spring market in decades, with affordability being the largest hurdle. The national median sale price…

Financing

Real Estate Taxes Are Highest in These States

Aside from home prices, many Americans need to consider an area’s property taxes to ensure their future property fits into their budget.…

Advertisement
Advertisement

More in Category




Advertisement
Advertisement

Create an account

By creating an account, you agree to Pro Builder's terms of service and privacy policy.


Daily Feed Newsletter

Get Pro Builder in your inbox

Each day, Pro Builder's editors assemble the latest breaking industry news, hottest trends, and most relevant research, delivered to your inbox.

Save the stories you care about

Lorem ipsum dolor sit amet lorem ipsum dolor sit amet lorem ipsum dolor sit amet.

The bookmark icon allows you to save any story to your account to read it later
Tap it once to save, and tap it again to unsave

It looks like you’re using an ad-blocker!

Pro Builder is an advertisting supported site and we noticed you have ad-blocking enabled in your browser. There are two ways you can keep reading:

Disable your ad-blocker
Disable now
Subscribe to Pro Builder
Subscribe
Already a member? Sign in
Become a Member

Subscribe to Pro Builder for unlimited access

Lorem ipsum dolor sit amet, consectetur adipisicing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua.