Housing affordability conditions for first-time and entry-level buyers are improving at a reasonable pace. According to the National Association of Home Builders’ (NAHB) Wells Fargo Cost of Housing Index (CHI), in Q1 of 2026 the income share needed to buy a new home dropped 4% from Q2 2025.
Despite mortgage rate changes and overall economic uncertainty, this exhibits promising signs for housing affordability for everyday Americans. The trend continues to existing homes, where income share needed to purchase dropped from 37% in Q2 2025 to 32% in Q1 2026.
“The U.S. data for the percentage of earnings needed to purchase a new home in the first quarter is based on a national median new home price of $403,200 and median income of $106,800, said Rose Quint, assistant vice president for survey research at NAHB. “The first quarter median new home price is down slightly from $405,300 in the fourth quarter of 2025.”
