A US Family Now Needs 34% of Its Income for a New-Home Mortgage, the First Rise in Three Quarters

A typical US family needed 34% of its income for a mortgage on a median new home in the second quarter, up from 32%, as the rate assumption rose to 6.51%.

American housing affordability got worse in the second quarter of 2026 for the first time in a year. The NAHB/Wells Fargo Cost of Housing Index, released on 20 August, shows a typical family needing 34% of its income to cover the mortgage on a median-priced new home, up from 32% in the first quarter. For existing homes the deterioration was sharper: 36%, up from 32%. Three consecutive quarters of improvement ended.

Rates did most of the damage, but not all of it

The index's mortgage rate assumption rose from 6.20% to 6.51% between the two quarters — 31 basis points, enough on its own to add meaningfully to a monthly payment. Prices moved too. The median new home price rose 2% to $410,700, from $403,200. The median existing home price rose 8%, from $404,300 to $434,900, which is why the existing-home reading jumped four percentage points against the new-home reading's two.

Median family income, the denominator in all of this, stood at $106,800.

The strain is not distributed evenly

For families earning half the median, the numbers stop describing a stretch and start describing an impossibility. Such a household would need 67% of its income for a median new home and 71% for a median existing one, both up from 65% in the first quarter. No conventional underwriting standard permits that, which is another way of saying these buyers are not in the market at all.

Eight metros where more than half of income goes to the mortgage

Of the 175 metropolitan areas the index covers, 8 are severely cost-burdened, meaning a typical family there would need more than 50% of income for a typical mortgage. Another 77 are moderately cost-burdened at 31–50%, and 90 sit at 30% or below. San Jose is the extreme at 82% for existing homes; Decatur, Illinois is the most affordable at 16%. A five-fold gap between two American cities makes the national figure a weak guide to any actual purchase.

What our own US numbers show

Glopra's United States row, snapshotted 23 July 2026, records a national average of $2,454 per square metre with a gross rental yield of 6.71% and prices up 2.0% over twelve months. Our Miami row from the same date reads very differently — $5,802 per square metre and prices down 3.1% year on year. Miami costs more than twice the national average per square metre and is falling while the country rises.

That divergence is the same point the NAHB metro table makes from the affordability side. A national affordability index is a summary of 175 markets that are not moving together, and the gap between them has been widening since rates began climbing again.

The counterweight

One quarter does not establish a trend, and the rate assumption is the swing factor: if mortgage rates retrace, the third-quarter reading improves without a single price falling. The more durable signal is the 8% quarterly jump in the median existing-home price, which no change in rates will undo.

Sources: NAHB https://www.nahb.org/news-and-economics/press-releases/2026/08/housing-affordability-worsens-on-higher-mortgage-rates; Bloomberg via Yahoo Finance https://finance.yahoo.com/real-estate/articles/us-housing-affordability-gauge-worsens-173247649.html

Market data: United States · Miami