More than 65% of U.S. households can no longer afford a median-priced home, and with mortgage rates remaining elevated and the prices of heavily tariffed and dutied building materials persistently high, households are getting very little relief. That is according to the latest edition of the National Association of Home Builders (NAHB) Eye on Housing report, which warned that even a small change to mortgage rates is having a major impact on housing affordability.
“At a median home price of $413,595 and a 30-year mortgage rate of 6%, roughly 88.2 million households are priced out of the market,” according to Na Zhao, an economist from the NAHB. “If the median new home price goes up by just $1,000, the monthly mortgage payment increases by about $6, and the required minimum income rises by nearly $300 per year. This small change alone will price an additional 156,405 households out of the market.”
And rising prices are increasingly squeezing middle-income households, not just those at the lower end of the income distribution. “More than half of U.S. households earn less than $80,000 annually, and nearly two-thirds earn less than $106,000,” Zhao said. “These households fall short of the income required to qualify for a mortgage on a median-priced new home in 2026. As a result, affordability challenges are not limited to low-income households.”
“Expanding the supply of entry-level housing remains critical to improving affordability. Without additional supply, even small increases in home prices are likely to continue pushing more households out of the market.”
It comes as Wood Central last week reported that the U.S market is now flooded with lumber with Trump’s tariffs, a weak housing market, and major restructuring to blame for West Fraser Timber’s US$751 million loss in the fourth quarter of 2025, with the giant warning that elevated tariffs and an oversupply of wood continue to distort operating conditions.
