As a result of limited resale inventory and measures by home builders to increase housing affordability, the median price on an existing home in the United States during the second quarter of 2024 was higher than that of a new home. Therefore, a family needed to spend more of their income to buy a typical existing home than a typical newly built home.
The National Association of Home Builders/Wells Fargo Cost of Housing Index found that in the second quarter of 2024, a family earning the nation’s median income of $97,800 needed 38% of its income to cover the mortgage payment on a median-priced new home. The median price of a new home in the second quarter was $412,300 versus the $422,100 price for a median existing home, therefore the share of income needed to buy a typical existing home was higher, at 39%.
Lower-income challenges
The CHI also found that low-income families, defined as those earning only 50% of the median income, would have to spend 77% of their earnings to pay for a median-priced new single-family home in the second quarter. However, those seeking to purchase existing homes in the U.S. found their costs rising in the second quarter. A typical family needed 39% of their income to pay for a median-priced existing home in the second quarter, up from 36% in the first quarter. A low-income family needed 79% of their income versus 71% in the previous quarter.
NAHB's take on the data
“While interest rates are expected to gradually move lower in the coming quarters, home price growth will likely slow as inventory levels rise and prospective buyers continue to experience challenging affordability conditions,” says Robert Dietz, chief economist, National Association of Home Builders.