"The quarterly index shows that the average family needed to spend 34% of their income on a mortgage in Q4 of 2025 for a median-priced, new single-family home. This compares to 35% in Q3 and 34% in Q2, indicating a small change in housing affordability. In 2023, the index reached its highest at 41%."
"Recent U.S. Census Bureau data showed that the median sales price of new homes sold in December fell 2.0% year over year, from $423,000 to $414,000. Last year, builders across the country increasingly offered incentives and price cuts to motivate buyers to close, amid ongoing affordability challenges and economic uncertainty."
"The typical 30-year mortgage rate, which now stands at about 6.0%, also steadily fell from a high of around 6.7% last May, leading to lower monthly payments. Affordability for existing homes also improved. During the second quarter of last year, the typical family spent 37% of their income on a median-priced existing home. By the fourth quarter, that share decreased to 34%."
"Realtor.com Chief Economist Danielle Hale predicted that the average monthly mortgage payment could decrease by 1.3% during 2026. Mortgage rates are expected to remain mostly steady, and home prices are forecasted to rise only slightly, even as household incomes improve."
The NAHB/Wells Fargo Cost of Housing Index shows housing affordability improved in 2025, with the average family spending 34% of income on a mortgage for a median-priced new single-family home in Q4, down from 35% in Q3. Median new home prices fell 2.0% year-over-year to $414,000 in December, driven by builder incentives and price cuts, particularly in the Sun Belt where oversupply persists. The 30-year mortgage rate declined to approximately 6.0% from a high of 6.7% in May, reducing monthly payments. Affordability for existing homes also improved, with families spending 34% of income by Q4 compared to 37% in Q2. Economists predict modest continued improvement in 2026, with monthly mortgage payments potentially decreasing 1.3% as rates stabilize and home prices rise slightly.
Read at www.housingwire.com
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