Despite 7% Mortgage Rates, One in Seven Families Could Still Afford To Take On A New Mortgage

• Despite mortgage rates soaring to above 7% in 2022, roughly 7.9 million families that did not own the home they lived in could afford to take on a new mortgage payment.
• The share of mortgage-ready families varied from 25.6% in Pittsburgh to just 2.6% in San Diego. 
• Higher-income regions with more expensive housing markets have stricter land-use rules and fewer mortgage-ready families.

In 2022, 39% of the roughly 134 million families [1] residing in the U.S. did not own the home they lived in, according to estimates from the American Community Survey. [2] While some families chose to rent, others simply could not afford to own a home. Among those who did not own their home, roughly 7.9 million of these families were “income mortgage-ready”, meaning the share of their income spent on a mortgage payment for the typical home in their local market [3] would have been 30% or lower.

Families are more likely to be mortgage-ready in metros with fewer land-use regulations, even with relatively lower median incomes