NAHB not too long ago launched its 2025 Priced-Out Evaluation, highlighting the housing affordability problem. Whereas earlier posts mentioned the impacts of rising house costs and rates of interest on affordability, this publish focuses on the associated U.S. housing affordability pyramid. The pyramid reveals that 70% of households (94 million) can’t afford a $400,000 house, whereas the estimated median worth of a brand new house is round $460,000 in 2025.
The housing affordability pyramid illustrates the variety of households in a position to buy a house at varied worth steps. Every step represents the variety of households that may solely afford properties inside that particular worth vary. The biggest share of households falls inside step one, the place properties are priced beneath $200,000. As house costs improve, fewer and fewer households can afford the following worth degree, with the highest-priced properties—these over $2 million—having the smallest variety of potential patrons. Housing affordability stays a essential problem for households with revenue on the decrease finish of the spectrum.
The pyramid relies on revenue thresholds and underwriting requirements. Underneath these assumptions, the minimal revenue required to buy a $200,000 house on the mortgage price of 6.5% is $61,487. In 2025, about 52.87 million households within the U.S. are estimated to have incomes not more than that threshold and, subsequently, can solely afford to purchase properties priced as much as $200,000. These 52.87 million households kind the underside step of the pyramid. Of the remaining households who can afford a house priced at $200,000, 23.53 million can solely afford to pay a high worth of someplace between $200,000 and $300,000. These households make up the second step on the pyramid. Every subsequent step narrows additional, reflecting the shrinking variety of households that may afford more and more costly properties.
It’s worthwhile to check the variety of households that may afford properties at varied worth ranges and the variety of owner-occupied properties obtainable in these ranges (excludes properties built-for-rent), as proven in Determine 2. For instance, whereas round 53 million households can afford a house priced at $200,000 or much less, there are solely 22 million owner-occupied properties valued on this worth vary. This pattern continues within the $200,000 to $300,000 worth vary, the place the variety of households that may afford properties is far greater than the variety of housing models in that vary. These imbalances present a scarcity of reasonably priced housing.
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