New homes became more unaffordable for the typical American household in November 2023. Even though mortgage rates dipped almost two-tenths of a percentage point from their October 2023 high, as expected, the median new home sale price rebounded by more than enough to offset both the potential reduction in mortgage payments from those lower rates and the increase in median household income for the month.The rest of the story is all about the numbers that underlie that outcome. Here’s a quick summary of the relevant numbers for November 2023:

All these figures together mean the monthly mortgage payment for the median new home sold in November 2023 with zero-percent down would consume 47.2% of the income for a household at the exact middle of the income spectrum in the U.S. The following chart confirms that mortgage payment is well-elevated above the affordability thresholds that lenders set when determining how much they will allow a household to borrow to buy a home.chartLooking forward, we already know the average interest rate on a conventional 30-year fixed-rate mortgage dropped to 6.82% in December 2023. We’ll find out next month if that will be enough to reverse the upward trend in unaffordability for home ownership that has come to define the Biden era in the United States. ReferencesU.S. Census Bureau. New Residential Sales Historical Data. Houses Sold. [Excel Spreadsheet]. Accessed 23 December 2023. U.S. Census Bureau. New Residential Sales Historical Data. Median and Average Sale Price of Houses Sold. [Excel Spreadsheet]. Accessed 23 December 2023. Freddie Mac. 30-Year Fixed Rate Mortgages Since 1971. [Online Database]. Accessed 7 January 2024. Note: Starting from December 2022, the estimated monthly mortgage rate is taken as the average of weekly 30-year conventional mortgage rates recorded during the month.More By This Author:The S&P 500 Retreats In First Trading Week Of 2024
Median Household Income In November 2023
Dividends By The Numbers In December 2023 And 2023-Q4