How affordable is the typical new home sold in the U.S. for the typical American household?

There are three factors that play into the answer to that question: the median price of new homes sold, mortgage rates, and median household income. In September 2026, all three of these factors increased over their revised levels from August 2026.

Here are the three numbers that define how affordable a new home is for a typical American household in September 2026:

• Median new home sale price: $400,400
• Median household income: $88,076
• Average 30-year conventional fixed mortgage rate: 6.86%

Assuming a 0% down payment, a new home sold in September 2026 at the nation's median sale price would have a mortgage payment that consumes 35.8% of the income earned by a household at the exact middle of the U.S. spectrum of income. The following chart reveals the typical new home sold in the U.S. remained provisionally within the affordable reach of the typical American household during September 2026, though it's nearing the threshold that would push it back into the levels of unaffordability that characterized the Biden-Harris era of high inflation in the United States:

The relative affordability thresholds indicated on the chart are defined by the 28/36 rule that mortgage lenders traditionally use to determine whether to extend a mortgage to new home buyers. Here, a monthly mortgage payment that consumes more than 36% of a household's income means that the median new home sold is fully outside the affordable reach of a household earning the median income, even if it has no other debts. At the other end of the rule, a mortgage that does not exceed 28% of a household's income is considered affordable even with average levels of other kinds of debt.

September 2026's relative affordability level falls between these two levels but nearer the upper end, which means it can be considered affordable provided the household has very little other debt or if its other expenses are lower than average.

Perhaps the biggest reason new home prices have remained within the traditional mortgage lender affordability thresholds as mortgages rates have risen is the increased incentives homebuilders are providing to new home buyers to boost their sales. These incentives, including special financing that reduces the interest rates new home buyers will pay for their mortgages, have been offsetting the overall increase in average mortgage rates in the U.S.

Looking forward, the average interest rate for a 30-year conventional fixed rate mortgage in the U.S. rose to 7.33% in October 2026, so there are serious headwinds for new home affordability in the U.S. Which is a shame because they've only been within the affordable reach of a majority of American households in the past twelve months after having been fully out of reach from 2022 through most of 2025. We'll know more after we have October's median household income and median new home sale price data.

References

U.S. Census Bureau. New Residential Sales Historical Data. Houses Sold. [Excel Spreadsheet]. Accessed 27 October 2026.

U.S. Census Bureau. New Residential Sales Historical Data. Median and Average Sale Price of Houses Sold. [Excel Spreadsheet]. Accessed 27 October 2026.

Freddie Mac. 30-Year Fixed Rate Mortgages Since 1971. [Online Database]. Accessed 1 November 2026. 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 calendar month.

Image Credit: Microsoft Copilot Designer. Prompt: "An editorial cartoon of a young couple seeking to buy a new home who are talking to a real estate agent who tells them 'NEW HOMES TODAY HAVE BECOME MORE AFFORDABLE THAN EXISTING HOMES' as they stand beside a lot with a house under construction with a yard sign that says 'ASK ABOUT OUR BUILDER INCENTIVES'".

The S&P 500 (Index: SPX) rode its rally above its mean trendline with respect to its trailing year dividends per share for the first few weeks of October 2026. But the index kept dipping below it starting in the last week of the month before breaking more sharply below it on the last day of the month.

The culprit behind the downward move was the drop in several megacap AI tech stocks, which thanks to their outsized concentration within the market capitalization-weighted index, caused it to drop below it when they turned south after reporting disappointing revenues and a diminished earnings outlook.

By contrast, the stocks of S&P 500 companies outside of the megacap AI tech stocks did pretty well during the month, but they didn't gain enough market cap to offset the losses of the most heavily weighted companies in the index.

The following chart visualizes the relationship between the value of the S&P 500 and its underlying trailing year dividends per share from 29 December 2023 through 30 October 2026:

Overall, stock prices behaved in an orderly manner in October 2026, with the index' trajectory keeping within one standard deviation of its mean trendline throughout the month.

Image Credit: We modified a public domain image of a São Paulo highway shield we came across on Wikimedia Commons to make the S&P 500's own highway sign.

Motio Research's initial estimate of U.S. median household income for September 2026 is $87,850, an apparent $340 (or 0.4%) decrease from the firm's initial estimate of $88,190 for August 2026.

We're describing the month-over-month change as "apparent" because Motio Research recalibrated its historical monthly median household income estimates. Here's their note of caution against direct comparison with their previous monthly estimates:

The September update incorporates annual Census rebenchmarking of Motio's public dollar estimates, using the official 2025 median household income of $87,460. The recalibration changes published dollar levels but not their growth rates or the separate historical Momentum series. Previously published dollar estimates should not be compared directly with the recalibrated levels.

Motio Research's recalibration of their nominal median household income estimates is substantial, affecting all their estimates extending back to January 2010. From January 2010 through January 2020 and from December 2020 through July 2025, most changes are small, with the recalibrated estimates within one percent of Motio's previously reported figures. The period from February 2020 through November 2020, which covers the period during 2020's Coronavirus Pandemic when the Census Bureau wasn't able to fully survey the income of lower income-earning U.S. households, saw somewhat larger changes though the recalibrated estimates are still skewed upward because of the undercollection of survey data on which they're based.

Motio Research's monthly median household estimates from August 2025 through August 2026 saw large downward adjustments, lowering the estimates anywhere from one to two percent from pre-recalibration reported levels. Previously, we observed Motio Research's estimates during this period were running "hot" with respect our estimates. We had hypothesized that difference might be attributable in part to the Trump administration's program to pay cash awards and also for the travel of millions of illegal aliens who volunteered to return to their home countries as they took advantage of the program, since it would be most attractive to the lowest-income earning households within this category and fit the timing of a surge in Motio Research's median household income data. The recalibrated data suggests the impact of that program has had a much smaller effect on median household income than it had appeared from the previously reported estimates.

The following screenshots of Motio Research's interactive charts visualize the latest trends in the U.S.' median household income. The first chart presents the firm's Household Income Index, which is based on three-month moving average that sets the period of January 2010 through March 2010 at a value of 100 after making adjustments for inflation and seasonality in the data. The second chart presents their monthly median household income estimates in nominal (not adjusted for inflation) terms for the period from January 2010 through September 2026.

Monthly Household Income Index

Median Household Income Estimates

Looking at the recalibrated nominal data, median household income increased by $650 (or 0.75%) from August 2026's recalibrated $87,200 to September 2026's $87,850, which is a significant month-over-month change.

Analyst's Notes

Political Calculations produces monthly median household income estimates using an alternate methodology that complements Motio Research's survey-based estimates. In September 2026, Political Calculations' initial estimate of median household income is $88,076. This estimate is $498 (or 0.56%) lower than our initial estimate of $88,574 for August 2026's median household income.

The following chart presents our latest estimates of U.S. median household income, both adjusted for inflation (blue) and not-adjusted for inflation (red) for each month from January 2000 through September 2026.

Political Calculations' September 2026 estimate is $226 (0.3%) higher than Motio Research's estimate of $87,850. It is also $5,338 higher than our revised non-inflation adjusted estimate of $82,378 for median household income in January 2025, or $320 higher than the inflation-adjusted estimate of $87,757. The increase in inflation since February 2026 has eroded real median household income in the months since, though not so much that the typical American household is still better off than they were at the end of the Biden-Harris administration's tenure in office.

That matters because it plays into how affordable it is for a household at the exact middle of the nation's spectrum of income to live in the U.S. On that count, here's a special bonus preview of a chart we'll discuss later this week that focuses on the biggest single expense most households have and how its relative affordability has changed since January 2000 (and also since January 2025).

References

U.S. Bureau of Economic Analysis. Table 2.6. Personal Income and Its Disposition, Monthly, Personal Income and Outlays, Not Seasonally Adjusted, Monthly, Middle of Month. Population. [Online Database (via Federal Reserve Economic Data)]. Last Updated: 29 October 2026. Accessed: 29 October 2026.

U.S. Bureau of Economic Analysis. Table 2.6. Personal Income and Its Disposition, Monthly, Personal Income and Outlays, Not Seasonally Adjusted, Monthly, Middle of Month. Compensation of Employees, Received: Wage and Salary Disbursements. [Online Database (via Federal Reserve Economic Data)]. Last Updated: 29 October 2026. Accessed: 29 October 2026.

Image credit: U.S. Census Bureau. We modified the public domain image to make it more generally applicable beyond reporting the median household income from 2022.

Compared to the previous week, the S&P 500 (Index: SPX) didn't change much in the trading week ending on Friday, 30 October 2026. The index closed out the week at 7,580.07, down a little under 0.6% from where it closed the preceding week.

But that doesn't quite capture what happened. Stock prices rose the first three days of the week. And then, after the bell on Wednesday, 28 September 2026, tech giant Alphabet (NASDAQ: GOOG and GOOGL) reported not just that they were burning through cash to build up their Artificial Intelligence (AI) infrastructure, their advertising revenue from Internet searches was lower than expected, as their AI-based search feature underperformed expectations.

That was enough to deflate the company's stock by 12% on Thursday, 29 October 2026, which in turn, contributed to pulling the S&P 500 down by 0.3% for the day. But then after the market closed on Thursday, Amazon (NASDAQ: AMZN) and Intel (NASDAQ: INTC) delivered bad news of higher costs and falling revenues.

Of the two, Intel had the worst of it, with its stock plunging by over 28% by the time markets closed on Friday. More significantly, their combined bad news prompted investors to tank the stock prices of other chipmakers. Including the biggest company in the S&P 500, Nvidia (NASDAQ: NVDA), which lost over 4% of its value and became the second-biggest company in the index as a result by the end of the day.

By the end of the day, the S&P 500 lost over 1.8% of its total value. The latest update of the alternative futures chart shows the index' trajectory dropped to be near the bottom of the typical range the dividend futures-based model would place it assuming investors are focused on the current quarter of 2026-Q4 in setting stock prices.

With bulls spooked by the sudden rapid deflation of some of the biggest companies in the AI tech sector after their earnings outlook shifted to be worst than expected, we can expect more outsize reactions as other companies report their earnings in the next few weeks. How stock prices will react will depend greatly on what new information investors will need to absorb from the newstreams. Much like they had to do with the market moving headlines from the final trading week of October 2026....

Monday, 26 October 2026

• Signs and portents for the U.S. economy:
• US retailers face record holiday delivery prices from surcharges tied to costlier diesel
• Oil slides over 2% as traders weigh Saudi attack risks, demand destruction
• US airlines favor higher fares over fuller planes as fuel costs squeeze profits
• Microsoft to Trim Workforce with Buyout Offers for 60,000 Staff
• 60,000 Microsoft Workers Offered Buyouts As AI Spending Boom Reshapes Workforce
• Fed minions expected to leave interest rates unchanged this week:
• Fed to hit pause on rate hikes, but maybe not for long
• Some growth signs developing in China:
• China's domestic car sales seen rising 2% in 2027 after 2026 slump
• Bigger trouble, wage-price inflation spiral developing in Japan:
• Japanese companies compensate users as cyberattacks buffet economy
• Japan auto union group looks beyond inflation-linked pay hikes for 2027 talks
• Bigger trouble developing in Eurozone:
• Euro zone firms find it harder to get credit, ECB survey shows
• EU Climbs Escalation Ladder With Beijing, Plans Wider Curbs On Chinese Imports
• Wall Street ends higher as AI capex fears pause, Fed decision looms

Tuesday, 27 October 2026

• Signs and portents for the U.S. economy:
• AI investment boom powers US business spending on equipment in September
• Oil rises as hopes for diplomacy offset impact of renewed Houthi attacks
• OPEC+ oil producers set to keep output targets steady at Sunday meeting, sources say
• US energy firms to produce record natgas in 2026 as global demand soars
• Hold or sell? High Treasury yields spur US banks to rethink bond portfolios
• CRE debt is due, presenting a ‘massive’ opportunity
• US new home sales fall in September; median house price drops from year ago
• Fed minions hear speculation in media about their next moves:
• Fed expected to hold rates steady, but Warsh may point way to more hikes
• Fed rate hikes are coming, but not this week: CNBC survey
• Bigger trouble, mixed growth signs developing in China:
• In China, the AI bubble has already burst
• China's industrial profit growth picks up amid deepening economic divergence
• Former BOJ chief minion super excited for more interest rate hikes in Japan, JapanGov minion standing by to keep Japan's currency from collapsing:
• Ex-BOJ chief Kuroda backs more rate hikes, his former deputy urges caution
• Japan stands ready to take decisive action in currency market, finance minister says
• Bigger trouble developing in Eurozone:
• Interview. France must ‘cure ourselves’ without more spending, says finance minister
• Euro zone mortgage demand falls as rates rise, ECB survey shows
• Euro zone lending holds up even as banks tighten access
• Wall Street ends higher ahead of FOMC rate decision, big tech earnings
• Wall Street ends higher on revived AI momentum
• The S&P 500 minus AI is having its best month in years

Wednesday, 28 October 2026

• Signs and portents for the U.S. economy:
• Mortgage rates fell for the second straight week, but more borrowers still opted for riskier loans
• Oil rises over 1% after Saudi Arabian refinery attack reignites supply risk
• US crude and distillate inventories fall, gasoline stocks rise, EIA says
• US goods trade deficit widens as AI-related demand pushes imports to record high
• Walmart cuts holiday meal basket price to $3.50 per person
• As expected, Fed minions leave U.S. interest rates unchanged, threaten future hikes:
• Fed leaves rates unchanged as it awaits 'accumulation of more information'
• Warsh to attend Fed jobs and productivity task force hearing to refine views
• Fed officials not aligned on weight of financial conditions
• Fed's Warsh says US economy not running too hot
• Bigger trouble, stimulus developing in China:
• China's new export curbs draw a line around its AI crown jewels
• Why China is desperate to ship cars outside of the country
• Wall Street advances for the third consecutive session after the Fed keeps rates unchanged
• Wall Street ends higher as Fed holds key rate steady, focus turns to earnings

Thursday, 29 October 2026

• Signs and portents for the U.S. economy:
• Q3 GDP Advance Estimate: Real GDP Rises 3.4%
• US Economy Grows 3.4% In Q3, Fastest Pace In A Year, Supercharged By Massive AI Capex Spending
• US inflation heats up in September; consumer spending rises
• AI-related investment, consumers likely boosted US economic growth in third quarter
• Wall Street's AI bet: Own the infrastructure, collect the rent
• Oil falls as diplomacy hopes outweigh Middle East escalation fears
• US weekly jobless claims hover near 57-year lows
• Fed minions thinking about their balance sheet:
• Fed highlights economic strength but muddies outlook for Treasuries
• Fed's policy committee to weigh balance sheet issues early next year, Warsh says
• Bigger trouble developing in China:
• Chinese AI model carries out complex cyberattacks in controlled tests, researchers say
• DeepSeek, Moonshot used OpenAI's GPT-6 Astra to train latest models, The Information reports
• Job hunting chief ECB minion to quit ECB early as ECB minions skip rate hike for now with plan to hike Eurozone interest rates later:
• ECB President Lagarde To Step Down In Feb, Months Before Her Term Ends
• ECB President Lagarde resigns at time of mounting challenges for Europe
• ECB flags December hike but sees yield rise hitting growth
• Nasdaq sheds 1.4% as Alphabet’s historic drop rattles the markets, U.S. stocks suffer
• Wall Street ends lower as Alphabet revenue miss revives AI capex jitters
• Alphabet shares fall after revenue miss, cash burn worsens
• Alphabet earnings miss reflects first real sign that AI is taking a bite out of search

Friday, 30 October 2026

• Signs and portents for the U.S. economy:
• Oil prices increase as attacks on shipping ramp up
• Fed minions say inflation bad enough to justify rate hikes, but not until December 2026:
• Fed officials make case for rate hikes amid ongoing inflation concerns
• Fed needs at least two more rate hikes, Logan says
• BOJ minions claim success in hitting their inflation target, thinking about more rate hikes later in year to contain it:
• BOJ declares victory in hitting price target, signals near-term hikes
• "Mission Accomplished": BOJ Declares Victory Over Deflation, Then Speeds Up ETF Dump To A Breakneck 43 Years
• BOJ holds rates as underlying inflation aligns with 2% target for first time since 2013
• Bigger trouble developing in Eurozone:
• French economy "at a standstill" adds to France's budget crisis risk
• S&P 500 ends week lower as AI concerns fuel rotation into defensive sectors
• Wall Street closes sharply lower as AI cash burn fears spark tech selloff
• Nasdaq faces $2 trillion wipeout in October as AI spending fears deepen
• Nasdaq finishes almost -3% as investors dispose of tech stocks
• Amazon burns cash, Intel flags weak PC demand as AI boom's costs ripple across markets
• Intel on course for worst day ever, triggers global chip rout
• Intel Shares Crash Most On Record

The CME Group's FedWatch Tool projections were unchanged. It still anticipates the Fed will next act to hike the Federal Funds Rate by a quarter point on 9 December (2026-Q4). Looking further forward in time, the FedWatch tool projects the Fed will hike this interest rate by a quarter percent on 17 March (2027-Q1). After that, the FedWatch Tool anticipates one more rate hike in 2027, coming when the Fed meets on 15 September (2027-Q3).

The Bureau of Economic Analysis reported its initial estimate for annualized real GDP growth during 2026-Q3 is +3.4%, just a bit lower than the +3.5% growth projected by the Atlanta Fed's GDPNow tool a week before.

The GDPNow tool has shifted forward to projecting the current quarter of 2026-Q4's inflation-adjusted economic growth rate, with its first estimate for the quarter coming in at 3.2%.

Image credit: Microsoft Copilot Designer. Prompt: "An editorial cartoon of a Wall Street bull taking cover under a table as a few balloons labeled 'AI' begin to pop while a smiling bear loads a dart labeled 'COSTS' into a blowgun".

In a world where self-driving cars and robot vacuum cleaners are a reality, it was only ever a matter of time before the next must-have gadget came onto the market. Or really just last winter, which we're mentioning today because, as you might already know, winter is coming.

What if you took one of those new robots made for mowing lawns and re-equipped it so it can remove snow from your driveway? Tom Moloughney spent 30 hours setting up a robot yard maintenance tool made by Yarbo to remove snow from his New Jersey driveway in February 2026. He posted a video of it in action, which went viral enough to made the news:

That's the short and sweet version. Moloughney's video taking viewers through the unboxing, assembly, and programming of the snow-blowing robot is over 46 minutes long.

Sending a robot out into the cold to do a thankless, tiring task while you stay cozy indoors is true outside-the-box thinking. What kind of better snow-removal robots will we see in the years to come?

HT: Core77.