The cost of the existing home exceeded the cost of the new home in Q2

Washington, DC, August 22, 2024 – As a result of limited resale inventory and measures taken by homebuilders to increase housing affordability, the median price for an existing home in the United States during the second quarter of 2024 was was bigger than that of a new house. home. Therefore, a family had to spend more of their income to buy a typical existing house than a typical newly built house.

The National Association of Home Builders (NAHB)/Wells Fargo Housing Cost Index (CHI) found that in the second quarter of 2024, a family earning the nation’s median income of $97,800 needed 38% of their income to to cover the mortgage payment on a new home at an average price. The median new home price in the second quarter was $412,300 compared to $422,100 for a median existing home, so the share of income needed to buy a typical existing home was higher at 39%.

“As the nation faces a housing affordability crisis, additional affordable housing supply is the only way to sustainably ease the housing cost burden for American families,” said NAHB President Carl Harris, a custom home builder in Wichita, Kansas. “NAHB’s 10-point plan to address the housing affordability crisis gets at the heart of the problem, addressing impediments such as excessive regulations, ineffective local zoning rules and permitting roadblocks that prevent builders from increasing the nation’s housing supply.”

CHI also found that low-income families, defined as those earning just 50 percent of median income, would need to spend 77 percent of their earnings to pay for a new, median-priced single-family home in the second quarter.

The index debuted in the first quarter of this year, and there was no change in the percentage of a family’s income needed to purchase a new home (38%) between the first and second quarters of 2024, and the percentage of income for low-income people . families remained the same in both trimesters as well (77%).

However, those looking to buy existing homes in the US found their costs rising in the second quarter. A typical family needed 39 percent of their income to pay for an existing median-priced home in the second quarter, up from 36 percent in the first quarter. A low-income family needed 79% of income, compared to 71% in the previous quarter.

“While interest rates are expected to gradually decline in the coming quarters, home price growth is likely to slow as inventory levels rise and potential buyers continue to face difficult affordability conditions,” said NAHB’s chief economist, Robert Dietz.