These scenarios finance each year’s national median-priced new home. They do not describe the typical first-time buyer, an existing-home purchase or today’s market. Every money figure is in 2022 dollars unless marked nominal.
A household can have a manageable mortgage payment but still struggle to accumulate the down payment. Compare both obstacles below; neither alone measures affordability.
Observed prices, rates and reference income
| Input | 1989 | 2007 | 2022 |
|---|---|---|---|
| Median new-home price, nominal | $120,000 | $247,900 | $434,500 |
| Same price in 2022 dollars | $274,961 | $351,723 | $434,500 |
| Average 30-year fixed mortgage rate | 10.32% | 6.34% | 5.34% |
| Lowest to highest weekly rate | 9.68–11.22% | 5.96–6.74% | 3.22–7.08% |
| Median monthly after-tax income | $4,680 | $5,560 | $6,210 |
| Income 95% sampling interval | $4,480–$4,880 | $5,380–$5,740 | $5,920–$6,490 |
| Income source window | 1988–1990 CEX interviews | 2006–2008 CEX interviews | 2021–2023 CEX interviews |
The price is the Census annual median, not an average of quarterly medians. The rate is the mean of 52 weekly Freddie Mac observations. These are separate series, not the matched price and rate of an actual transaction. Income is a modeled CEX household median, not the income of buyers.
CEX income includes food-stamp benefits as resources; it is not all unrestricted cash. The saving scenarios assume cash saving equal to the stated fraction of that reference income, not that restricted benefits can pay a mortgage or down payment.
Assumptions used in both scenarios
A 30-year fixed loan; annual property tax of 1% of the purchase price; annual homeowners insurance of 0.35%; closing costs of 3%. Below 20% down, annual mortgage insurance is 0.5% of the initial loan. These are fixed illustrative assumptions, not measured historical averages. Maintenance, utilities, repairs, association fees, furnishings and tax benefits are excluded.
Freddie Mac's historical benchmark describes prime conforming loans near 20% down. Using that rate for 10% down, with mortgage insurance added, is a counterfactual, not an observed low-down-payment quote. Its collection method changed in November 2022.
10% down
| Cost or comparison | 1989 | 2007 | 2022 |
|---|---|---|---|
| Down payment | $27,496 | $35,172 | $43,450 |
| Assumed closing costs | $8,249 | $10,552 | $13,035 |
| Total cash needed upfront | $35,745 | $45,724 | $56,485 |
| Monthly principal and interest | $2,230 | $1,967 | $2,182 |
| Assumed monthly property tax | $229 | $293 | $362 |
| Assumed monthly homeowners insurance | $80 | $103 | $127 |
| Assumed monthly mortgage insurance | $103 | $132 | $163 |
| First-month interest, included in payment above | $2,128 | $1,672 | $1,741 |
| First-month principal, included in payment above | $102 | $295 | $441 |
| Modeled total monthly payment | $2,642 | $2,495 | $2,834 |
| Payment / reference median after-tax income | 56.5% | 44.9% | 45.6% |
| Monthly payment at year's lowest to highest weekly rate | $2,526–$2,810 | $2,417–$2,579 | $2,347–$3,274 |
| Years to cash upfront at 5% of after-tax income saved | 12.7 | 13.7 | 15.2 |
| Years to cash upfront at 10% of after-tax income saved | 6.4 | 6.9 | 7.6 |
| Years to cash upfront at 20% of after-tax income saved | 3.2 | 3.4 | 3.8 |
20% down
| Cost or comparison | 1989 | 2007 | 2022 |
|---|---|---|---|
| Down payment | $54,992 | $70,345 | $86,900 |
| Assumed closing costs | $8,249 | $10,552 | $13,035 |
| Total cash needed upfront | $63,241 | $80,897 | $99,935 |
| Monthly principal and interest | $1,983 | $1,749 | $1,940 |
| Assumed monthly property tax | $229 | $293 | $362 |
| Assumed monthly homeowners insurance | $80 | $103 | $127 |
| Assumed monthly mortgage insurance | $0 | $0 | $0 |
| First-month interest, included in payment above | $1,892 | $1,486 | $1,548 |
| First-month principal, included in payment above | $91 | $263 | $392 |
| Modeled total monthly payment | $2,292 | $2,145 | $2,429 |
| Payment / reference median after-tax income | 49% | 38.6% | 39.1% |
| Monthly payment at year's lowest to highest weekly rate | $2,188–$2,441 | $2,075–$2,219 | $1,996–$2,820 |
| Years to cash upfront at 5% of after-tax income saved | 22.5 | 24.2 | 26.8 |
| Years to cash upfront at 10% of after-tax income saved | 11.3 | 12.1 | 13.4 |
| Years to cash upfront at 20% of after-tax income saved | 5.6 | 6.1 | 6.7 |
The payment range changes the interest rate only, holding the annual median price fixed. It is a timing sensitivity, not a confidence interval. The payment-to-income percentage divides a hypothetical payment by a separate income median; it is not a median buyer burden or a mortgage qualification rule.
Principal reduces the loan balance rather than paying for current consumption, and its first-month amount is already part of the payment above. The down payment likewise becomes home equity; both still have to be paid in cash.
Saving times start from zero savings and hold income, home prices and the saving fraction constant, with no investment return. They show the size of the cash requirement, not a prediction of how long families actually wait to buy.
A separate check on home-price change
| Index | 1989 | 2007 | 2022 |
|---|---|---|---|
| Nominal | 100 | 234.7 | 377.4 |
| Inflation adjusted | 100 | 145.3 | 164.7 |
This index tracks repeat transactions and refinancing appraisals, not the changing mix of new homes sold. It is price-change context only: it is not a dollar price and is not used to calculate the purchase prices above.
Sources and reproducibility
- Census and HUD annual new-home sales prices
- Freddie Mac historical mortgage rates
- FHFA house-price index datasets
- CEX modeled after-tax income and inflation method
Scenario v1.1.0 · housing-entry-2026-10-03-r2. Income: cex-2026-10-03-r21. Download values, assumptions and source checksums.
Full limitations
- These are hypothetical financing scenarios, not observed payments or a claim that the reference family bought the median new home.
- The annual home-price median is not an average of monthly or quarterly medians. A change can reflect the mix, size, location and quality of newly sold homes.
- PMMS historically describes prime conforming loans around 80 percent loan-to-value. Applying the same benchmark to 10 percent down is an explicit counterfactual, not an observed 90-percent-LTV quote; mortgage insurance is added separately.
- The PMMS collection method changed on November 17, 2022. That year's rates moved sharply; annual averages do not describe every purchase date.
- Property tax, homeowners insurance, PMI and closing costs are fixed assumptions, not measured national historical averages. Actual amounts depend on location, property, borrower and lender.
- Payment-to-income is a ratio of a hypothetical payment to a separate CEX median income, not the median of individual buyer ratios and not a mortgage qualification test.
- Years to accumulate cash assume a fixed saving fraction, no existing savings, no investment return, no income growth and no future house-price change. They are not measured saving rates or predicted waiting times.
- Maintenance, repairs, utilities, association fees, moving costs, furnishings and tax benefits are excluded. This is not a complete ownership budget.