Where housing affordability is worst and costs are highest in the U.S.

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Across the country, the prospect of home ownership is slipping out of reach for the ordinary buyer. The affordability gap — an estimate of the difference between an area’s median household income and how much income is necessary to afford payments on a median-priced home in that area — is near a 10-year high in the U.S., according to an NBC News analysis of housing data. The analysis and the latest numbers from the NBC News Home Buyer Index show what experts say is a housing market inaccessible to a growing number of people. NBC News’ analysis shows: A household earning the local median income would be able to afford a home in more than 60% of counties nationwide. Five years ago, it would have been able to afford a home in just over 90%. Affordability is dropping even in counties with lower-priced homes. NBC News’ Home Buyer Cost Index — which measures how prices, mortgage rates and incomes affect home searches — is approaching highs last seen during a historically frenzied 2022 market. The Cost Index has increased in 89% of U.S. counties over the past five years as high interest rates and low construction have driven up prices. The median home sells for nearly $70,000 more than the average household can afford, pinching some buyers’ household budgets. It’s the third-worst the affordability gap has been in the 10-plus years of data. “It’s pretty much an impossible market, even for middle-income households,” said Alexander Hermann, a senior research associate at Harvard’s Joint Center for Housing Studies. From April 2019 to April 2024 in counties where data is available, the median list price rose 55% to $102,850, according to an NBC News analysis of Redfin data. Hermann attributes the persistent price pressure to supply shortages. Nationwide, according to Redfin data, inventory has decreased more than 30% since 2019, and has declined in 7 out of every 10 of the counties measured. Many financial advisers consider a home affordable if mortgage payments, taxes and insurance costs don’t exceed 30% of a household’s monthly budget. In 2019, a household earning the local median income could afford to buy the median-priced home in 94% of U.S. counties. Today, that can be said of only 63% of counties. The conservative estimate assumes a 20% down payment on a 30-year mortgage in which each monthly payment is no more than 30% of the household’s monthly pretax income. The gap between income and home price is particularly pronounced in the West.