Overview
- The NAHB/Wells Fargo Cost of Housing Index for Q2, released Thursday, showed mortgage payments on a median new home rose to about 34% of a typical family’s income, reversing recent improvement.
- A steep climb in 30‑year mortgage rates toward roughly 6.8% and a quarter‑over‑quarter 2% rise in median new‑home prices were the main drivers that increased monthly payment burdens.
- Households at half the median income faced extreme strain, needing roughly 67% of earnings for a new‑home mortgage and about 71% for an existing‑home mortgage in Q2, pushing many into 'severely cost‑burdened' territory.
- Builders cited higher construction costs, labor shortages and regulatory hurdles that, together with an estimated 1.2 million‑unit shortfall, limit new supply and lead firms to offer incentives and rate buydowns.
- A decade‑long pattern of prices outpacing incomes adds context: analysis shows home values rose faster than median household income in all 50 states from 2015–2024, and recently enacted measures to boost supply will take time to ease affordability.