Survey: 60% of Households Priced Out of New-Home Market
March 15, 2021
Sixty percent of U.S. households are priced out of the new-home market, according to estimates from the National Association of Home Builders.
About 75.1 million households would be unable to qualify for a mortgage to purchase a median-priced new home under standard underwriting criteria. What’s more: If the median price of a home increases by $1,000, another 154,000 households will be priced out, the analysis notes. Researcher Na Zhao used a 2.8% interest rate to make those calculations, but the 30-year fixed-rate mortgage averaged 3.05% last week.
The states that would have the largest number of households priced out of the new-home market if median prices increased by $1,000 are Texas, California, and Florida. Researchers note these also are the nation’s three most populous states. The new-home market has been facing pressure to raise costs due to escalating lumber prices as well as labor and lot shortages.
“Pyramid Shows 21.1 Million Households Cannot Afford a $100,000 Home,” National Association of Home Builders’ Eye on Housing blog (March 9, 2021)
Updated: May 14, 2021