$1,000: how much you need to lock 200,000 home buyers out of the us

Photo credit: Michael Patrick

New research by the National Association of Home Buliders reveals that each $1,000 increase in the cost of a new median-priced home price forces 206,000 prospective buyers out of the marketplace.

The number of households affected varies across states and metro areas, with factors such as population and income distribution coming into play. Indeed, in Wyoming, just 313 households would be unable to qualify for a mortgage if prices jumped $1,000. In Texas, on the other hand, a $1,000 rise would force out 18,250.

Based on national mortgage underwriting standards and incorporating the latest income distribution data from the American Community Survey and the U.S. Department of Housing and Urban Development, the report contains detailed results for more than 300 metro areas.

The analysis found that every $833 increase in fees paid during the construction process – such as the price of a construction permit or an impact fee – adds an additional $1,000 to the final price of the home.

"This study highlights the real effects that building regulations have on housing affordability," comments NAHB Chairman Kevin Kelly, a home builder and developer from Wilmington, Del. "Local, state and federal government officials need to know that higher regulatory costs have real consequences for working American families. Oftentimes, these government regulations end up pushing the price of housing beyond the means of many teachers, police officers, firefighters and other middle class workers."