In another sign of America’s ongoing housing affordability crisis, the National Association of Home Builders /Wells Fargo Cost of Housing Index (CHI) found that in the third quarter of 2024, a family earning the nation’s median income of $97,800 needed 38% of their income to cover the mortgage payment on a median-priced new home. Low-income families, defined as those earning only 50% of the median income, would have to spend 75% of their earnings to pay for the same new home.

The figures track identically for the purchase of existing homes. A typical family would have to pay 38% of their income for a median-priced existing home while a low-income family would need to pay 75% of their earnings to make the same mortgage payment.

There was no change in the share of a family’s income needed to purchase a new home (38%) between the second and third quarters of 2024, but affordability did improve slightly for low-income families, with the CHI falling from 77% to 75%. 

Meanwhile, affordability of existing homes edged higher for both median- and low-income families between the second and third quarter. The Cost of Housing Indices were 38% and 75% in the third quarter vs. 39% and 79%, respectively, in the second quarter. 

CHI is also available for 176 metropolitan areas, calculating the percentage of a family’s income needed to make the mortgage payment on an existing home based on the local median home price and median income in those markets.

In 10 out of 176 markets in the third quarter, the typical family is severely cost-burdened (must pay more than 50% of their income on a median-priced existing home). In 85 other markets, such families are cost-burdened (need to pay between 31% and 50%). There are 81 markets where the CHI is 30% of earnings or lower.

The Top 5 Severely Cost-Burdened Markets

San Jose-Sunnyvale-Santa Clara, Calif., was the most severely cost-burdened market on the CHI, where 85% of a typical family’s income is needed to make a mortgage payment on an existing home. This was followed by:

Urban Honolulu, Hawaii (75%)

San Diego-Chula Vista-Carlsbad, Calif. (70%)

San Francisco-Oakland-Berkeley, Calif. (68%)

Miami-Fort Lauderdale-Pompano Beach, Fla. (63%)

Low-income families would have to pay between 127% and 170% of their income in all five of the above markets to cover a mortgage.

The Top 5 Least Cost-Burdened Markets

By contrast, Decatur, Ill., was the least cost-burdened market in the CHI, where typical families needed to spend just 16% of their income to pay for a mortgage on an existing home. Rounding out the least burdened markets are:

Cumberland, Md.-W.Va (18%)

Springfield, Ill. (18%)

Elmira, N.Y. (19%)

Peoria, Ill. (19%)

Low-income families in these markets would have to pay between 33% and 39% of their income to cover the mortgage payment for a median-priced existing home.

Visit nahb.org/chi for tables and details.