94 million U.S. households cannot afford a $400,000 home in 2025
In 2025, an estimated 94 million U.S. households, around 70% of the total, cannot afford to purchase a $400,000 home, based on income thresholds and underwriting standards. The affordability pyramid model used in the analysis segments households by the maximum-priced home they can purchase, highlighting a steep drop in affordability as home prices rise, according to the National Association of Home Builders (NAHB) 2025 Priced-Out Analysis.
The base of the affordability pyramid is made up of 52.87 million households that can only afford homes priced at $200,000 or less. This requires a minimum qualifying income of $61,487 at a 6.5% mortgage rate. The next 23.53 million households can only afford homes priced between $200,000 and $300,000. Each subsequent pricing tier captures a smaller segment of the population, with only a minimal number able to afford homes priced above $2 million.
However, the housing supply does not meet affordability needs. While 53 million households can afford homes priced at $200,000 or less, only 22 million owner-occupied homes exist within that range. A similar mismatch appears in the $200,000 to $300,000 category, where more households can afford homes than there are units available. These gaps reveal a significant shortage in affordable housing stock across the country.
