NAHB just lately launched its 2025 Priced-Out Evaluation, highlighting the housing affordability problem. Whereas earlier posts mentioned the impacts of rising residence costs and rates of interest on affordability, this submit focuses on the associated U.S. housing affordability pyramid. The pyramid reveals that 70% of households (94 million) can not afford a $400,000 residence, whereas the estimated median value 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 value steps. Every step represents the variety of households that may solely afford properties inside that particular value vary. The most important share of households falls inside step one, the place properties are priced underneath $200,000. As residence costs improve, fewer and fewer households can afford the subsequent value degree, with the highest-priced properties—these over $2 million—having the smallest variety of potential consumers. Housing affordability stays a important problem for households with revenue on the decrease finish of the spectrum.
The pyramid relies on revenue thresholds and underwriting requirements. Beneath these assumptions, the minimal revenue required to buy a $200,000 residence on the mortgage charge 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, due to this fact, can solely afford to purchase properties priced as much as $200,000. These 52.87 million households type 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 prime value 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 value ranges and the variety of owner-occupied properties accessible 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 value vary. This development continues within the $200,000 to $300,000 value vary, the place the variety of households that may afford properties is far greater than the variety of housing items in that vary. These imbalances present a scarcity of inexpensive housing.
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