Housing affordability is tightening as home prices continue to climb faster than incomes. The median family income rose by 4.5% year over year in December 2021, while the monthly mortgage payment rose 22.5%, the National Association of REALTORS® reports.

The threat of rising mortgage rates could pose another challenge to housing affordability in the coming months as well.

In the fourth quarter, the average monthly mortgage payment on an existing single-family home rose to $1,240, based on a median home value of $361,700 with a 20% down payment and 3.13% 30-year fixed-rate mortgage, according to NAR’s latest quarterly housing report. This marks a jump of $201 compared to a year ago.

Mortgage payments are comprising a median of 16.9% of a family’s household income, up from 14.7% a year ago, according to NAR data.

“The good news is that home prices should begin to normalize later in 2022 as more homes come on the market,” Lawrence Yun, NAR’s chief economist, said in a statement after the release of NAR’s quarterly housing data. NAR: Home Price Surge Continued in Fourth Quarter

Where Households Need to Earn the Most

In 20 markets, a family needed more than $100,000 to afford a 10% down payment on a mortgage. In these markets, the median home sales price ranged from $537,400 to $1.675 million. Some of these priciest metros for homeownership are:

• San Jose-Sunnyvale-Santa Clara, Calif.
• San Francisco-Oakland-Hayward, Calif.
• Anaheim-Santa Ana-Irvine, Calif.
• San Diego-Carlsbad, Calif.
• Los Angeles-Long Beach-Glendale, Calif.
• Hawaii (Urban Honolulu)
• Colorado (Boulder, Denver-Aurora-Lakewood, Fort Collins)
• Seattle-Tacoma-Bellevue, Wash.
• Portland-Vancouver-Hillsboro, Ore.
• Naples-Immokalee-Marco Island, Fla.
• Barnstable Town, Boston-Cambridge-Newton, Mass.-N.H.
• Nassau County-Suffolk County, N.Y.
• New York-Newark-Jersey City, N.Y.-N.J.
• New York-Jersey City-White Plains, N.Y.-N.J.
• Bridgeport-Stamford-Norwalk, Conn.
• Reno, Nev.
• Washington, D.C.-Arlington-Alexandria, D.C.-Va.

Where Households Need the Least

Pockets of affordability in housing still exist, however. In 81 markets a family needed less than $50,000 to afford a home. NAR located metro areas in which the median home sales price was less than $160,000 and a family needed less than $30,000 to purchase a home. Some of those markets, according to NAR, include:

• Decatur, Peoria, Davenport-Moline-Rock Island, Ill.-Iowa
• Waterloo-Cedar Falls, Springfield, Rockford, Ill.-Iowa
• Youngstown-Warren-Boardman, Toledo, Erie, Ohio-Pa.
• Binghamton, Elmira, N.Y.
• Cumberland, Md.-W.Va.