Housing Boom Prices Out Millions of Households
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That's how many more households would be unable to afford a newly constructed home if the median price rises by just $1,000, according to a new analysis by the National Association of Home Builders (NAHB).
The median price for a new single-family home has risen by more than $17,000 to over $346,000 in the past year, thanks to the skyrocketing price of lumber, shortages in building materials and construction workers, and a lack of buildable lots, according to NAHB.
Currently, 75.1 million, or 60% of U.S. households, are already “priced out” of a new home at the median price, the NAHB said. The trade group’s analysis relies on Census Bureau income distributions and assumes a down payment equal to 10% of the purchase price, a 30-year fixed rate mortgage, and mortgage insurance costs.
The study, which estimated priced-out figures for every state and over 300 metropolitan areas, showed Texas having the largest number of homebuyers that would be priced out, followed by California and Florida.
Trying to determine what you can afford to buy? Use our mortgage calculator to learn how much your monthly payment might be for different home prices.