Roughly 87.5 million households across the U.S. are not able to afford a new median priced home in 2022, according to NAHB’s Eye on Housing, meaning that 69% of Americans have incomes that are insufficient to qualify for a mortgage under standard underwriting criteria. NAHB’s recently released ‘priced out’ estimates reveal that if the median new home price increases an additional $1,000, another 117,932 households will be priced out of the housing market and will no longer qualify for a mortgage.
The metropolitan areas which would be most affected by a sudden price gain include New York-Newark-Jersey City, NY-NJ-PA, and Chicago-Naperville-Elgin, IL-IN-WI, where 4,734 and 4,273 households would be priced out, respectively.
The metropolitan area with the largest priced out effect, in terms of absolute numbers, is New York-Newark-Jersey City, NY-NJ-PA, where 4,734 households would not be able to qualify for a mortgage to purchase a new median-priced home if its price goes up by $1,000. This is largely because New York metro area, where the median-priced new home is only affordable to 14% of households, is the most populous metro area with roughly 8 million households. Chicago-Naperville-Elgin, IL-IN-WI metro area registers the second largest number of priced-out households (4,273), followed by Philadelphia-Camden-Wilmington, PA-NJ-DE-MD metro area (3,235).
Advertisement
Related Stories
Housing Markets
These Housing Markets Are Seeing Higher Than Average Price Increases
The majority of metros where housing costs increased fastest are in the Northeast
Affordability
FHLBank of Atlanta Commits $10M for New Affordable Housing Program
The initiative will primarily benefit homebuyers in southeastern states
New-Home Sales
More Than Half of All Homebuyers Say They Prefer New Homes
This trend comes as the price gap between new and existing homes narrows