The median price of new homes sold in the United States paid by their buyers is declining.

Incentives provided by homebuilders to entice sales is offsetting an increase in mortgage rates in recent months, improving the affordability of new homes. So much so that new homes have become relatively more affordable than existing homes.

Here are the three numbers that define how affordable a new home is for a typical American household in July 2026 and how they've changed from the values we reported for May 2026:

• Median new home sale price: $393,800 (decrease of $31,100)
• Median household income: $88,150 (increase of $504)
• Average 30-year conventional fixed mortgage rate: 6.54% (increase of 0.10%)

Assuming a 0% down payment, a new home sold in July 2026 at the nation's median sale would have a mortgage payment that consumes 34% 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. moved to fall within the affordable reach of the typical American household during July 2026:

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.

July 2026's relative affordability level falls between these two levels, but nearer the upper end, which means a new home is affordable for a household earning the nation's median household income provided it maintains a low level of other kinds of debt.

References

U.S. Census Bureau. New Residential Sales Historical Data. Houses Sold. [Excel Spreadsheet]. Accessed 25 August 2026.

U.S. Census Bureau. New Residential Sales Historical Data. Median and Average Sale Price of Houses Sold. [Excel Spreadsheet]. Accessed 25 August 2026.

Freddie Mac. 30-Year Fixed Rate Mortgages Since 1971. [Online Database]. Accessed 1 September 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: Couple sitting among moving boxes in new home photo by Vitaly Gariev on Unsplash.

Imagine this scenario. You've just left your old job, but you still have a 401(k) retirement savings account at your former employer into which you had been making pre-tax contributions. You're ready to move that money into an Individual Retirement Account (IRA) where you're thinking about rolling it over into a Roth IRA so it can grow completely tax free into the future. But if you do, you'll have to pay income taxes on the amount you roll over, which you'll have to have withheld out of the money that's in your pre-tax account because you don't have the cash to otherwise pay them.

How much of those pre-tax savings will you have to have withheld to pay those income taxes? And how long will it take you to recover that money with the tax-free growth of the post-rollover amount invested in the Roth IRA?

Believe it or not, these are questions that many Americans may find they need to answer several times during the course of their working lives. In 2025, about half of working Americans were contributing money directly from their paychecks to 401k-type plans through their employers, with most making their contributions on a pre-tax basis.

At the same time, about half of Americans will change employers after about four years on the job. If they've been making pre-tax contributions to their retirement savings, they'll have these exact questions.

Which is why we've built the following tool! Here, we'll need you to enter the amount of money you might be looking to convert from a pre-tax retirement savings account to a Roth IRA and your marginal income tax rate for the tax year in which you'll make the change, assuming the taxes withheld will have to come out of your accumulated pre-tax retirement savings. We'll then estimate the amount of taxes to be withheld and how long your tax-free savings will take to recover back to your pre-tax savings amount. If you're reading this article on a site that republishes our RSS news feed, click here to access a working version of this tool!

In using this tool, the marginal federal tax rate is the one that applies when you add the amount of pre-tax income you're seeking to roll over into a Roth IRA to your expected taxable income for the year. For our default example, we've set the marginal federal income tax rate to be 22%, which applies to the following taxable income amounts for the indicated income tax filing status:

• Single or Married filing separately: $48,476 - $103,350
• Married filing jointly: $96,951 - $206,700
• Head of household: $64,851 - $103,350

The expected growth rate of the tax-free investment is set at 9%, which is rounded down from the average rate of return for an investment in the S&P 500 of any duration in the years since January 1871.

With these defaults and a pre-tax amount of $24,000, the tool finds the amount of income taxes to be withheld is $5,280, which reduces the amount of funds being rolled into a Roth IRA down to $18,720. If it grows at an average of 9% a year, the amount rolled into the Roth retirement account would take 2.88 years to recover its pre-tax value.

Since those default values may be very different from ones that might be relevant for you, you're welcome to change them to ones that apply for whatever scenario you'd like to consider.

In Part 2, we'll use the same math to explore a different scenario for executing a pre-tax to Roth rollover that can lead to a potentially better outcome for investors considering executing this kind of strategy.

Image Credit: Microsoft Copilot Designer. Prompt: "A digital art concept of a pre-tax retirement account being rolled over into a Roth IRA that shows income taxes being paid out of the pre-tax retirement account".

Which states are the most and least affordable places for American families to live after paying taxes and their essential expenses?

The Common Sense Institute tallied up the numbers and ranked each state after subtracting federal and state taxes and also essential expenses like housing, utilities, groceries, auto and health insurance, fuel, and childcare in each state from the paychecks for a family of four with two adult breadwinners who work full time and earn the state's median hourly income.

Visual Capitalist's Dorothy Neufield then revisualized the results to focus on how much that of the modeled families' income remained. Here's her version of the Common Sense Institute's map:

Here's her analysis of the most and least affordable states:

In top-ranked states like Iowa, households keep nearly 35% of their income, about $2,900 per month. In Hawaii, that figure drops to just 9%. That’s a difference of more than $2,000 per month in disposable income.

[...]

Midwestern states dominate the rankings, largely due to lower housing and childcare costs.

Iowa ranks first, with households keeping 34.7% of their income, followed by South Dakota (34.6%) and North Dakota (33.5%).

[...]

In the least affordable states, families spend up to 91% of their income on essentials and taxes, leaving little room for savings or unexpected expenses.

Hawaii families are most strained, with 9% of income left, followed by California at 10.9%. Between 2019 and 2025, California households saw one of the largest declines in affordability across states.

Massachusetts, despite high incomes, ranks near the bottom. Childcare alone consumes 24% of household income, showing how a single cost category can erode income advantages.

The Common Sense Instutute also looks at how each state's affordability has changed from 2019 to 2025. They find that Kansas, New Mexico, and Utah have seen their cost of living fall the most, while Rhode Island, Massachusetts, and California have seen the biggest escalation in living expenses over these years.

References

Dorothy Neufield. Mapped: Where Americans Keep Most of Their Paycheck. Visual Capitalist. [Online article]. 27 April 2026.

The affordability of new homes in the U.S. improved in March 2026 as builder incentives to reduce the sale prices of new homes combined with relatively low mortgage rates and a rising income for the typical American household.

The first two of these factors directly reduced the typical mortgage payment for U.S. households, while the third makes the lower cost for owning a new home more affordable by definition for the nation's median income-earning household. Here are the applicable numbers:

• Median new home sale price: $387,400
• Median household income: $87,164
• Average 30-year conventional fixed mortgage rate: 6.18%

For that household at the exact middle of the U.S. income spectrum, the average mortgage payment for a new home purchased at the national median sale price with zero-percent down would consume 32.6% of the household's monthly income in March 2026.

This value falls in between the two major affordability thresholds mortgage lenders have traditionally used in the form of the 28/36 rule to determine whether to extend a mortgage to new home buyers. The following chart shows how March 2026's level of relative affordability for new homes compares with the affordability for every month from January 2000 through March 2026:

In March 2026, buying a new home was the most affordable it has been in the U.S. for a typical American household at any time in the last four years.

References

U.S. Census Bureau. New Residential Sales Historical Data. Houses Sold. [Excel Spreadsheet]. Accessed 5 May 2026.

U.S. Census Bureau. New Residential Sales Historical Data. Median and Average Sale Price of Houses Sold. [Excel Spreadsheet]. Accessed 5 May 2026.

Freddie Mac. 30-Year Fixed Rate Mortgages Since 1971. [Online Database]. Accessed 11 May 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 new home buyer speaking with a real estate agent in front of a 'NEW HOME FOR SALE' sign that says 'MEDIAN PRICE MARKED DOWN TO $387,400!'"

In January 2026, new homes built in the United States clocked in at their most affordable level of the last four years.

This assessment is based on the following data points for the month:

• Median new home sale price: $400,500
• Median household income: $86,506
• Average 30-year conventional fixed mortgage rate: 6.10%

Of these three factors, the average 30-year fixed rate mortgage of 6.10% for January 2026 is the biggest contributor to the improvement in affordability. This is the lowest average monthly mortgage rate in the U.S. since September 2022.

At the same time, the median new home sale price of $400,500 ranks as the third-lowest median price recorded for new home prices in any month since July 2021, four months after Biden administration unleashed the high inflation that characterized the former President's term in office.

Meanwhile, median household income has risen to its highest level on record, even after adjusting for inflation.

Overall, these three things combined to make the monthly mortgage payment on a new home purchased at the nation's median sale price fall lower within the range of affordability in January 2026. The mortgage payment of a typical new home purchased in this month by a typical American household would consume 33.7% of its household income. The following chart shows where January 2026's affordability level fits within the data for this measure since January 2000:

Looking forward, the 30-year mortgage rate fell a little further in February 2026, providing a tailwind for affordability of the largest expense most American households have going into the month.

References

U.S. Census Bureau. New Residential Sales Historical Data. Houses Sold. [Excel Spreadsheet]. Accessed 19 March 2026. 

U.S. Census Bureau. New Residential Sales Historical Data. Median and Average Sale Price of Houses Sold. [Excel Spreadsheet]. Accessed 19 March 2026. 

Freddie Mac. 30-Year Fixed Rate Mortgages Since 1971. [Online Database]. Accessed 12 April 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: Wooden family figures and house with keys on table photo by IGOR LOLATTO on Unsplash.

When the price of fuel soars, drivers who seek to avoid spending money on petroleum have two options. They can:

• Drive less, or
• Slow down.

For many, driving less is an obvious solution, but one that isn't necessarily achievable. That's comes down to why people have cars in the first place. They need them to travel to and from work and also to and from where they buy the goods and services they need.

In today's world, whether they drive a gas-powered, battery-powered or hybrid vehicle, some non-zero percentage of the fuel or energy needed to enable their ride will be produced by fossil fuels. When the price of oil and other fossil fuels rise, the cost of essential commuting goes up as well. But you can limit your exposure to those higher costs by slowing down to drive your vehicle at speeds where it is more efficient.

That fact was established by a nearly three-decade old study by the U.S. Department of Energy that found that most gasoline-powered vehicles in the U.S. are operated at speeds at which they do achieve their peak level of fuel efficiency. At highway speeds, for instance, the forces of aerodynamic drag can substantially increase the amount of fuel an automobile engine has to burn in order to sustain a high velocity. A simple back-of-the-envelope calculation reveals that the amount of drag force that a car being driven at 75 miles per hour sees is some 33% higher than the same car being driven at 65 miles per hour would see.

Though today's roads have more electric and hybrid vehicles driving upon them, they are still affected by the same laws of aerodynamics. Like gas-powered vehicles, it takes less energy to sustain them moving at lower speeds, which means their batteries can hold their charges for longer.

But not too slow. Driving too slow also comes not just with a time penalty but also an increased penalty for fuel consumption. Most modern vehicles are designed to operate most efficiently at speeds ranging from 30 to 55 miles per hour. That's the sweet spot in which you can get the most distance driving out for your fuel consumption dollar.

We've tapped that old study to reverse-engineer the Fuel Economy vs Speed average vehicle profile developed by the U.S. Department of Energy and create the following tool, in which you can find out who much money you might save by going slower. If you're accessing this tool on a site that republishes our RSS news feed, please click through to our site to access a working version of the tool.

The cool thing about this tool is that you now have more weapons in your arsenal to help fend off the effects of higher gasoline prices! Armed with this information, you can now make whatever trade-offs you might need to your greatest advantage. For example, if getting the greatest possible savings is most important to you, you'll want to drive at speeds that produce the lowest equivalent cost per gallon of gas compared to your normal driving speeds. If you want to save gas money and time, you'll want to drive at speeds that give you the greatest equivalent "tax free" income compared to how you drive today.

Image credit: Lighted Automotive RPM, Temperature, Fuel, and Speedometer Gauges photo by Kevin kevin on Unsplash.

How much is the typical American household consumer unit paying out of pocket for health insurance premiums? And how has that changed from 1984 through 2024?

The annual Consumer Expenditure Survey is the go-to source for this kind of information, detailing how American consumer units spend money. "Consumer units", if you weren't already aware of this peculiar expression, is the Bureau of Labor Statistics' data jocks' affectionate nickname for American households that are close to, but not quite equivalent to, households. For what it's worth, the most basic difference is that a "consumer unit" in 2024 consisted of 2.4 people, but a household consisted of 2.54 people. Because that difference is very small, we'll just call it a "household consumer unit" and run with it.

In 2024, the average U.S. household consumer unit spent an average of $78,535 on everything it bought during the year. On average, that household consumer unit spent $4,055, or a little under 5.2% of its total expenditures, out of its own pocket for health insurance in 2024.

Our first chart tracks how the overall trend for out-of-pocket expenditures on health insurance has changed from 1984 through 2024:

The amount that Americans pay on health insurance has not slowed down since the implementation of the Affordable Care Act (ACA) of 2010. The law, which was intended to "bend the cost curve" of health insurance downward, has failed.

Our second chart looks at the more recent history from 2008 through 2024, where here, we're tracking the change in how health care costs have changed since 2008.

We find the cost of health insurance has been increasing much faster than the costs for what Americans pay out-of-pocket for medical services, drugs, and medical supplies. All these costs have risen since the Biden administration unleashed high inflation in 2021, but health insurance has increased the most out of all these categories.

References

U.S. Bureau of Labor Statistics. Consumer Expenditure Survey. Multiyear Tables. [PDF Documents: 1984-1991, 1992-1999, 2000-2005, 2006-2012, 2013-2020. Excel spreadsheet: 2021-2024]. Reference URL: https://www.bls.gov/cex/home.htm. 19 December 2025. 

Image credit: Health Insurance Card and Stethoscope photo by Marek Studzinski on Unsplash.

In 2024, the average American household "consumer unit" spent $78,535 on everything. That includes things like housing, transportation, food, personal insurance and pensions, healthcare, entertainment, apparel and services, education, cash contributions, alcoholic beverages, personal care products and services, reading materials, tobacco products and smoking supplies, and whatever miscellaneous consumer products there are that don't fit into any of these categories.

That's according to the Bureau of Labor Statistics' Consumer Expenditures report for 2024, whose publication was twice delayed until 19 December 2025. The report is compiled as part of the Consumer Expenditure Surveys program, which provides insight into what the average American "consumer unit", to use the BLS' term of endearment that roughly corresponds to households, got for all the money they spent in 2024.

That's useful information, which is why the results of the Consumer Expenditures surveys are used to determine the weighting of various consumer spending categories within the Consumer Price Index (CPI), the most commonly cited measure of inflation for the U.S. economy.

Because the data is used this way, it's important to track how the composition of consumer spending changes over time. For example, because the Affordable Care Act of 2010 (ACA) made health insurance much more costly, changes in the cost of health insurance has a bigger effect on consumer price inflation today than they did before the ACA was passed. Meanwhile, the amount that Americans spend on apparel has declined over time, so changes in apparel prices today have a smaller effect on the consumer price index than what they had back in the early 1980s when the survey began.

The Big Picture

Our first chart presents the average annual amount of consumer expenditures by American "consumer unit" households in each of the 41 years from 1984 through 2024.

These figures represent the nominal, or non-inflation adjusted, total average consumer spending in each year. As you can see, recent years have seen the amount the average American household consumer units spend rise sharply because of the high inflation unleashed during this period. Average household consumer unit expenditures grew from $61,334 in 2020 to $78,535 in 2024.

Growth of Consumer Expenditures by Major Categories

The next chart breaks out that spending into major expenditure categories, such as housing, transportation, food, life insurance & pension savings & Social Security, health insurance & medical expenses, entertainment, charitable contributions, apparel & other products, and education, to put them in order from highest to lowest:

This chart verifies spending is up substantially in nearly every major consumer expenditure category, with housing, transportation, and food seeing the most rapid increases from 2021 through 2024.

Changing Shares of Major Categories of Consumer Expenditures Over Time

The third chart reveals the trends for these categories, showing how their individual share of total average annual consumer expenditures has been changing since 1984.

Our final chart assembles all these categories together to reveal how the overall composition of household consumer unit expenditures has changed from 1984 through 2024. The major categories of consumer spending that have had a falling share of total consumer spending over time are shown in shades of green, those claiming a rising share over time are shown in shades of purple.

References

U.S. Bureau of Labor Statistics. Consumer Expenditure Survey. Multiyear Tables. [PDF Documents: 1984-1991, 1992-1999, 2000-2005, 2006-2012, 2013-2020. Excel spreadsheet: 2021-2024]. Reference URL: https://www.bls.gov/cex/home.htm. 19 December 2025. 

How much money will the U.S. government let you keep out of each of your regular paychecks in 2026?

2025 saw big changes to U.S. income taxes, mainly in the form of the One Big Beautiful Bill Act making the income tax cuts that were originally passed in 2017 and set to expire at the end of 2025 permanent. Without those changes, nearly all Americans would have been in for an income tax shock in 2026.

If they hadn't been, the higher income tax rates that prevailed back in 2017 would have come back into full force. If you're like many Americans, chances are you wouldn't have noticed until you got your first paycheck in the new year. That would be when you would direct evidence of how much more ol' Uncle Sam is gouging you. Fortunately, that nasty situation was avoided and the changes to how much the U.S. government is taking out of every one of your paychecks are pretty small by comparison. Compared to 2025, the various withholding levels have been adjusted for inflation and that's about all.

But inflation adjustments may not be the only changes that affect the bottom line of your paycheck. If you changed the contribution percentage to your 401(k) or 403(b) retirement savings plans, both the amount that goes these plans and the amount of your federal withholding taxes will change. Likewise if you use changed your contributions for a tax-deferred flexible spending account for covering your dependent or health care expenses.

Your 2026 paycheck may also see a change to its top line. If you get a raise, for example, that will affect the bottom line of your paycheck. The question is how much.

Our 2026 paycheck tool can help you find out what your paycheck will look like before you even see your first paycheck of the year! If you're reading this article on a site that republishes our RSS news feed, please click through to our site to access a working version of the tool. Otherwise, you're more than welcome to enter whatever numbers you want to consider for what your paychecks might look like in 2026.

But if you really want to see something, after you run the numbers for 2026, please check out our paycheck tool using 2017's income tax rates with your 2026 income to get an indication of how different your paycheck could have been without the One Big Beautiful Bill Act of 2025.

The tool's results convey how much money the IRS withholds for federal taxes from each of your paychecks in 2026. There are however a number of factors that will complicate your withholding tax results based upon how much you cumulatively earn during the year.

For example, once your cumulative income reaches $184,500 or higher, you will no longer have Social Security's payroll tax of your income deducted from your paycheck, which is 6.2% if you're an employee, but which doubles to 12.4% if you're self-employed (the self-employed pay both the employee and employer payroll taxes). Our tool is designed to provide withholding tax estimates for the majority of Americans who are employed by others. People making this amount of money don't really get a break however because they've already been pushed into a higher tax bracket - they are paying higher regular income tax rates than those paid by over half of all income-earning American households.

There's also the complication provided by the so-called "Additional Medicare Tax" that your employer is required to begin withholding from your paycheck if, and as soon as, your year-to-date income rises above the $200,000 mark. This surtax of 0.9% of gross income was imposed by the "Affordable Care Act" (a.k.a. "Obamacare") in 2010, which is still in effect. Since the money collected through this surtax does not directly support the Medicare program, unlike the real Medicare payroll taxes paid by you and your employer, it is really best thought of as an additional income tax. That additional income tax is not adjusted for inflation, which means that those who must pay it are subject to 1970s-style income tax bracket creep, even though the tax was sold on the claim that it would be limited to only very high income earners.

In the tool above, when the amount of your annual 401(k) or 403(b) retirement savings contributions exceed the annual limits set by law, we've limited the results our tool provides to be those consistent with their statutory limits, and will do so as if you specifically set the percentage contributions for these contributions with that in mind. Our tool does not consider whether you might take advantage of the "catch-up" provisions in the law that are available to individuals Age 50 or older. For example, individuals Age 50 to 59 can increase their annual contributions by $8,000 in 2026 (up from $7,500 in 2025). Meanwhile, individuals Age 60 to 63 can contribute up to an extra $11,250 beyond the standard maximum contribution to their tax-deferred retirement savings account.

Elsewhere on the Web

There are other salary and hourly paycheck calculators like this on the Internet, including the very well done tools available at PaycheckCity.com. PaycheckCity's State Salary Paycheck Calculators allow you to determine the amount of state income tax withholding that will be taken out of your paycheck in addition to what the federal government will take out. Payroll processing giant ADP also has a salary paycheck calculator that will give you good results. We still find the format of PaycheckCity's calculators to be more user friendly, but ADP's version has the benefit of having an all-in-one user interface.

If however you live in one of the states that have no taxes on earned income (Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington, or Wyoming), our tool above will provide you with a very good estimate of your actual take-home pay after Uncle Sam has gotten his dirty ape paws all over it.

Previously on Political Calculations

We've been in the business of calculating people's paychecks (not including state income tax withholding) since 2005!

• Your 2005 Paycheck
• Your 2006 Paycheck
• Your 2007 Paycheck
• Your 2008 Paycheck
• Your 2009 Paycheck
• Your Paycheck in 2010
• Your Paycheck in 2011
• Your Paycheck in 2012
• Your Paycheck in 2013: Part 1 - the "same as 2012" version.
• Your Paycheck in 2013: Part 2 - the "over the fiscal cliff" version.
• Your Paycheck in 2013: Part 3 - the "post-fiscal cliff deal" version.
• Your Paycheck in 2014
• Your Paycheck in 2015
• Your Paycheck in 2016
• Your Paycheck in 2017
• Your Paycheck in 2018, Before the Tax Cuts Kick In
• Your Paycheck in 2018, After the Tax Cuts Kick In
• The Bottom Line for Your 2018 Paycheck After the Tax Cuts
• Your Paycheck in 2019
• Your Paycheck in 2020
• Your Paycheck in 2021
• Your Paycheck in 2022
• Your Paycheck in 2023
• Your Paycheck in 2024
• Your Paycheck in 2025
• Your Paycheck in 2026

Image Credit: Microsoft Copilot Designer. Prompt: "An editorial cartoon of a boss and Uncle Sam sitting at a table marked as 'PAYROLL'. The boss is setting out stacks of cash to pay employees and Uncle Sam is taking part of that money."