Housing Affordability Improves Slightly in Late 2025, But Challenges Persists for Many U.S. Families

While new and existing homes remain largely unaffordable, affordability increased slightly in the second half of 2025, according to the latest data from the National Association of Home Builders (NAHB)/Wells Fargo Cost of Housing Index (CHI). 

In Q4 2025, the CHI results showed that a family earning the nation’s median income of $104,200 needed 34% of its income to cover the mortgage payment on a median-priced new home. Low-income families, or those earning only 50% of the median income, would have to spend 67% of their earnings to pay for the same new home.

The same trend holds true for existing homes. A typical family would have to pay 37% of their income for a median-priced existing home in the second quarter, 36% in the third quarter and 34% in the fourth quarter of 2025. A low-income family would need to pay 69% of their earnings to make the same mortgage payment on an existing home in the fourth quarter.

“While existing homes remain more expensive than new homes, that inversion of typical trends is closing,” saysRobert Dietz, NAHB Chief Economist. “A typical existing home sold for 5% more than a typical new home in the second quarter, 4% more in the third quarter and just 2% more in the fourth quarter of 2025. Median new home pricing has declined nearly 15% since late 2022 due to builder-enacted price cuts, a small decline in typical new home size and a geographic shift for construction to lower cost areas such as the Midwest. Existing home prices will be under downward pressure in 2026 due to ongoing housing affordability challenges.”

In eight out of 175 markets in the fourth quarter, the typical family is severely cost-burdened, meaning they must pay more than 50% of their income on a median-priced existing home. In 69 other markets, the typical family is cost-burdened, needing to pay between 31% and 50%. There are 98 markets where the CHI is 30% of earnings or lower.

San Jose-Sunnyvale-Santa Clara, California, was the most severely cost-burdened, where 80% of a typical family’s income is needed to make a mortgage payment on an existing home. This was followed by:

• Urban Honolulu, Hawaii (69%)
• San Francisco-Oakland-Fremont, Calif. (63%)
• San Diego-Chula Vista-Carlsbad, Calif. (62%)
• Barnstable Town, Mass. (56%)
• Miami-Fort Lauderdale-West Palm Beach, Fla. (56%)
• Naples-Marco Island, Fla. (56%)

Many of the least cost-burdened markets were located in Illinois. In the top five least cost-burdened markets, typical families needed to spend just 16-18% of their income to pay for a mortgage on an existing home. These markets include:

• Decatur, Ill. (16%)
• Elmira, N.Y. (16%)
• Springfield, Ill. (17%)
• Peoria, Ill. (17%)
• Davenport-Moline-Rock Island, Iowa-Ill. (18%)