USMacroBETA

Housing Affordability (constructed)

Neutral
CURRENT VALUE
28.2%
Source: Constructed by USMacro from Census MSPUS, Freddie Mac MORTGAGE30US and Census MEFAINUSA646N (all via FRED)
Data through: June 2026 · updated Sep 4 · Updates: Monthly (recomputed nightly; income denominator is annual, interpolated)
The three bars show the last 3 months for this indicator, oldest left to newest right. Bar height reflects each reading relative to the other two — the tallest is the highest of the three, the shortest the lowest.
↑ 0.1 pp MoM↓ 1.4 pp YoY
Historical context: Currently in the 52nd percentile of all historical readings.
What this means right now: Between 26.7% and 29.0% sits around the long-run middle of the history since 1971.
Housing Affordability (constructed) · Monthly · 1971–2026
  • NBER recessions
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Monthly values

Housing Affordability (constructed) — the last 12 months

Every month's reading, with the band the heatmap gives it. The chart above shows the same series in full.

MonthValueBand
Jun 202628.2%Within normal range
May 202628.0%Within normal range
Apr 202627.7%Within normal range
Mar 202627.1%Within normal range
Feb 202626.7%Within normal range
Jan 202626.9%Within normal range

Month-end readings of the same series the chart shows, from housing_affordability. Values are the current record, not point-in-time: a month that has since been revised shows its revised value.

What is the Affordability (constructed)?

This is a CONSTRUCTED series — USMacro computes it; no agency publishes it. It answers one question: what share of a median family's income would the mortgage on a median-priced new home take, at this month's 30-year rate?

The formula: the monthly payment on a 30-year fixed mortgage for the full median new-home sales price, annualized, divided by median family income, times 100. The price is the Census series MSPUS, quarterly; the quarter's price applies to its three months. The rate is the month's average 30-year rate from Freddie Mac's MORTGAGE30US, the weekly observations averaged. The income is the Census series MEFAINUSA646N, annual, interpolated linearly between year points and held flat after the latest published year. No down payment, taxes or insurance are assumed, so the level is a stylized burden, not a qualifying ratio; the movement is what carries the information.

Why construct it: the National Association of Realtors publishes a Housing Affordability Index, but its FRED series is licensed and carries a rolling twelve months of history, which cannot support a cycle chart. The Housing Cycle charter ruled the construction (Sep 4, 2026) with the formula published here and the label 'constructed' on every surface. Affordability is a driver in the Housing Cycle, never a voter: it is derived from price, rate and income, turns late, and 'improves' as the sector collapses (2008–12) — the feedback synthesis's C3.

How We Color-Code the Affordability (constructed)

Our heatmap colors this indicator against historically significant thresholds:

Below 23.5%
The most affordable readings — the bottom fifth of the constructed history since 1971, seen on today's bands in 1971–73, 2009–13 and 2019–21
23.5% – 26.7%
Affordable — the second fifth of the history since 1971
26.7% – 29.0%
Around the long-run middle — the middle fifth of the history since 1971
29.0% – 33.8%
Stretched — the fourth fifth; on today's bands, 1991–92, 1994, 2005–07 and most months since mid-2022
Above 33.8%
The heaviest burdens — the top fifth; on today's bands, the years 1979 to 1991 and the 2022–23 rate shock

Historical Extremes — What Happened Next?

When this indicator reaches extreme levels, history shows consistent patterns:

Oct 1981Volcker-era rate peak
56.3%
The all-time high (56.3% in October 1981): 30-year rates above 18% put the median new home's payment at more than half of median family income. Single-family starts hit their 1981 low the same month. Computed from what was published at the time, the month read 61.0%.
Dec 2020Pandemic rate low
18.6%
The all-time low, on record-low mortgage rates. The burden nearly doubled within two years as rates and prices both rose, to 35.4% by October 2022.
Oct 2022Rate-shock peak
35.4%
The highest since 1990 — 7% mortgage rates on record prices. New-home sales had fallen 15% in the year into this peak, and single-family starts 21%; both rose over the year after it. Computed from what was published at the time, with 2021's income the latest, the month read 39.1%.

Frequently Asked Questions

What exactly is constructed, and from what?
Three FRED series: the median sales price of new houses sold (Census, MSPUS, quarterly), the 30-year fixed mortgage rate (Freddie Mac, MORTGAGE30US, weekly), and median family income (Census, MEFAINUSA646N, annual). USMacro computes the 30-year payment on the full median price at the month's average rate, annualizes it, and divides by that month's interpolated income. The result is a percent of income, monthly since April 1971.
Why interpolate income, and what happens after the latest year?
Median family income is published once a year, about nine months after the year ends. Within a year the series is interpolated linearly between the two year points; after the latest published year it is held flat until the next print arrives, at which point the preceding months are recomputed. The page says 'constructed' for this reason: the denominator is an interpolation. The consequence: a month's value on this chart is not final until the income year it interpolates toward has been published, typically a little over two years after the month ends. The longest wait so far was 1,007 days (about 33 months), for January 2017.
What does a date view show — the heatmap's Time Machine, the Housing Cycle's date picker?
A version computed only from what had been published by that day, on a day the site has no record of its live heatmap; on a recorded day, the heatmap shows the cell as it was that day. The computed version reads the newest median-price quarter, the month's weekly rates, and the income of the latest published year held flat. There is no interpolation into a year not yet out. Its three inputs carry no archived first print, so each is today's value, dated by the day it was published. Each month's reading is made once, on the day its last weekly rate was published, and never changes after. It is not the series on this chart. On 266 of the 543 months with a color, each month read against the history up to then, the two sit in a different color band (measured October 3, 2026). The ladder starts in April 1981, ten years into the series. The differences are mostly toward worse affordability, because the interpolated income runs ahead of the published one. The Housing Cycle's driver strip reads that version, which stood at 30.7% in its latest month. This chart, the hero and the monthly table keep the constructed series as described above, which ends with the latest published price quarter.
How does this compare with NAR's Housing Affordability Index?
NAR's index inverts the burden (higher = more affordable), assumes a 20% down payment, uses the median existing-home price, and applies a 25% qualifying ratio. USMacro's construction uses the new-home price with no down payment and shows the burden directly (lower = more affordable). The two move together; the levels are not comparable. NAR's series is licensed and carries only a rolling year of history on FRED.
Why is affordability a driver and not a voter in the Housing Cycle?
Because it is derived from price, rate and income rather than measured from the sector's activity, it turns late, and it 'improves' as the sector collapses. In 2008–12 affordability rose to its best readings in decades while starts sat at record lows (the record low came in April 2009). The Housing Cycle shows it as backdrop, colored by its declared favorable direction (lower), and never counts it.
How are this page's color bands set?
By a five-band quintile rule: the 20th, 40th, 60th and 80th percentiles of the series' own history, rounded to a tenth of a percent and inverted because a lower burden is the more affordable side. Today's color reads against the whole history, April 1971 to today: the edges now are 23.5%, 26.7%, 29.0% and 33.8%. A past month's color — in the Time Machine, on the Housing Cycle's driver strip and in the monthly table — reads against the history up to that month, as it would have read then. So the edges move a little as data arrives. A color exists once the series has ten years of history (here from April 1981). Nothing is tuned to the current reading.