Whereas new houses stay largely unaffordable, builder efforts to enhance housing affordability paid dividends within the second quarter of 2025, in accordance with the most recent information from the Nationwide Affiliation of Dwelling Builders (NAHB)/Wells Fargo Value of Housing Index (CHI). The CHI outcomes from the second quarter of 2025 present {that a} household incomes the nation’s median earnings of $104,200 wanted 36% of its earnings to cowl the mortgage fee on a median-priced new house. Low-income households, outlined as these incomes solely 50% of median earnings, must spend 71% of their earnings to pay for a similar new house.
The figures are considerably larger for the acquisition of present houses within the U.S., displaying that it took extra earnings to purchase an present house. A typical household must pay 37% of their earnings for a median-priced present house whereas a low-income household would wish to pay 74% of their earnings to make the identical mortgage fee.
The second quarter of 2025 marked the most important historic hole the place present house costs exceeded these of latest houses. Completely different dynamics within the two sectors are chargeable for the worth divergence. On one hand, builders are providing incentives for smaller houses on smaller tons, with streamlined choices and options, and thus shifting their manufacturing towards cheaper houses. Many present owners, in the meantime, are locked-in their houses by low mortgage charges, limiting resale stock, and inflicting present house costs to extend.
The share of a household’s earnings wanted to buy a brand new house was unchanged at 36% from the primary to the second quarter, whereas the low-income CHI fell from 72% to 71% over the identical interval. Median new house costs edged down 1%, from $416,900 in Q1 2025 to $410,800 in Q2 2025, whereas the typical 30-year mortgage fee slipped from 6.91% to six.88%.
Affordability of present houses, then again, edged decrease for each median- and low-income households between the primary and second quarters. Median present house costs rose 7% throughout this era, from $402,300 to $429,400. The share of earnings wanted to pay for an present house rose from 35% to 37% for a typical household and from 70% to 74% for a low-income household throughout this era.
CHI can be obtainable for 175 metropolitan areas, calculating the proportion of a household’s earnings wanted to make the mortgage fee on an present house based mostly on the native median house worth and median earnings in these markets.
In 10 out of 175 markets within the second quarter, the standard household is severely cost-burdened (should pay greater than 50% of their earnings on a median-priced present house). In 85 different markets, such households are cost-burdened (must pay between 31% and 50%). There are 80 markets the place the CHI is 30% of earnings or decrease.
The High 5 Severely Value-Burdened Markets
San Jose-Sunnyvale-Santa Clara, Calif., was probably the most severely cost-burdened market on the CHI, the place 93% of a typical household’s earnings is required to make a mortgage fee on an present house. This was adopted by:
- City Honolulu, Hawaii (73%)
- San Francisco-Oakland-Fremont, Calif. (72%)
- San Diego-Chula Vista-Carlsbad, Calif. (67%)
- Naples-Marco Island, Fla. (60%)
- Miami-Fort Lauderdale-Palm Springs, Fla. (60%)
Low-income households must pay between 119% and 186% of their earnings in all six of the above markets to cowl a mortgage.
The High 5 Least Value-Burdened Markets
In contrast, Decatur, Ailing., was the least cost-burdened markets on the CHI, the place typical households wanted to spend simply 17% of their earnings to pay for a mortgage on an present house. Rounding out the least burdened markets are:
- Elmira, N.Y. (18%)
- Peoria, Ailing. (19%)
- Davenport-Moline-Rock Island, Iowa-Ailing. (19%)
- Binghamton, N.Y. (19%)
Low-income households in these markets must pay between 33% and 38% of their earnings to cowl the mortgage fee for a median-priced present house.
Go to nahb.org/chi for tables and particulars.
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