As wages stagnate and housing prices climb, Americans are struggling to purchase homes. According to the National Association of Home Builders (NAHB), 103.5 million households are unable to afford a median priced home. Additionally, 106,031 households would be priced out if costs were to go up by $1,000. To determine how much Americans at varying pay scales can afford, NAHB created an affordability pyramid, which shows the majority of households can only afford a $150,000 home.
Of the remaining households who can afford a home priced at $150,000, 26.1 million can only afford to pay a top price of somewhere between $150,000 and $250,000 (the second step on the pyramid). Each step represents a maximum affordable price range for fewer and fewer households. Housing affordability is a great concern for households with annual income at the lower end of the distribution.