The US median household income is $72000, assuming 30% of the gross income (pretax) spent on housing, or $1,800 a month; a typical household could have afforded a $455,000 house when interest rates were at 2.5%. However, with interest rates hovering around 5.9%, affordability dropped to $303,000.
As of the first quarter of 2022, the median housing price is at an all-time $429,000. What if mortgage rates go as high as 6.5 to 7.0 percent?