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About 87.5 million households are unable to afford a median-priced new home, according to data from the National Association of Home Builders. If the new-home market prices were to rise by just $1,000, an additional 117,932 would be priced out.
Mortgage rates also could further hamper household affordability. Many economists have predicted rates will rise over the course of this year.
NAHB researchers provide an example of how affordability erodes with rising rates: For a new home in 2022 with an estimated median price of $412,506 and a 30-year fixed-rate mortgage of 3.5%, an increase of one-fourth of a percentage point in the interest rate would price about 1.1 million households.
A table provided by the NAHB shows the number of households priced out of the market for a new home at the median price of $412,5050 based on fluctuations in interest rates.
