Housing Affordability Index
If you feel like housing costs too much, the data probably backs you up.
Right now, 36% of the typical household's income goes to housing. A year ago that number was 39%, so things have gotten a little easier. Five years ago, it was 29%, and that's roughly in line with the historical average.
Today
Stretched
Mar 2026
Payment Share
36%
of household income
Hist. Average
35%
of household income
Worse Than
62%
of history
Last updated March 12, 2026
About This Index
This chart answers a simple question: what percentage of your income goes to owning a typical home? Not just the mortgage payment, but the full picture: principal, interest, property taxes, and homeowner's insurance. The Department of Housing and Urban Development (HUD) considers anything above 30% "cost-burdened," and above 50% "severely cost-burdened."
Here's how it works: take the median home price, put 20% down, finance the rest with a 30-year fixed rate, add property taxes at the 1.1% national average and homeowner's insurance at 0.5% of the home's value. Then divide that total monthly cost by median household income from the Census Bureau.
Three things drive this number: home prices, mortgage rates, and incomes. Today's affordability pressure comes mostly from home prices that have outpaced wage growth, even as rates have come down from their 2023 peaks.
Frequently Asked Questions
How is the housing affordability index calculated?
Take the median home price, put 20% down, finance the rest with a 30-year fixed rate, then add property taxes and homeowner's insurance. Divide that total monthly cost by median household income. HUD considers anything above 30% "cost-burdened" and above 50% "severely cost-burdened."
Is housing affordable in 2026?
Not really. The combination of elevated home prices and mortgage rates above 6% means the typical household spends well over 30% of income on housing costs, putting them solidly in "cost-burdened" territory. It's not impossible to buy, but it takes a bigger bite of your paycheck than it has for most of the past four decades.
What makes housing more or less affordable?
Three things: home prices, mortgage rates, and incomes. Affordability gets better when any of those moves in your favor (lower prices, lower rates, or higher income). The toughest periods happen when prices and rates are both high relative to what people earn.
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