Roughly 87.5 million households across the U.S. are not able to afford a new median priced home in 2022, according to NAHB’s Eye on Housing, meaning that 69% of Americans have incomes that are insufficient to qualify for a mortgage under standard underwriting criteria. NAHB’s recently released ‘priced out’ estimates reveal that if the median new home price increases an additional $1,000, another 117,932 households will be priced out of the housing market and will no longer qualify for a mortgage.
The metropolitan areas which would be most affected by a sudden price gain include New York-Newark-Jersey City, NY-NJ-PA, and Chicago-Naperville-Elgin, IL-IN-WI, where 4,734 and 4,273 households would be priced out, respectively.
The metropolitan area with the largest priced out effect, in terms of absolute numbers, is New York-Newark-Jersey City, NY-NJ-PA, where 4,734 households would not be able to qualify for a mortgage to purchase a new median-priced home if its price goes up by $1,000. This is largely because New York metro area, where the median-priced new home is only affordable to 14% of households, is the most populous metro area with roughly 8 million households. Chicago-Naperville-Elgin, IL-IN-WI metro area registers the second largest number of priced-out households (4,273), followed by Philadelphia-Camden-Wilmington, PA-NJ-DE-MD metro area (3,235).
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