NAHB Releases Updated 2024 Priced Out Estimates for New-Home Buyers

On Friday, the National Association of Home Builders (NAHB) released its updated 2024 priced out estimates. The estimates show how higher prices and interest rates impact housing affordability. The new estimates show that affordable housing is a serious problem even before any further price or interest rate increases.

Already in 2024, 103.5 million American households are not able to afford a median priced new home ($495,750), according to NAHB. NAHB says the reason is because those household incomes are insufficient to qualify for the required mortgage under standard underwriting criteria. Should the median home price increase by just $1,000, NAHB says an additional 106,031 households would be priced out of the market.

The underwriting criterion used to determine affordability is that the sum of mortgage payments, property taxes, homeowners, and private mortgage insurance premiums (PITI) during the first year is no more than 28% of the household’s income, NAHB explained. Key assumptions include a 10% down payment, a 30-year fixed-rate mortgage at an interest rate of 6.5%, and an annual premium starting at 73 basis points for private mortgage insurance.