Inflation hasn’t just made everyday purchases more expensive — it’s reshaping how Americans define affordability and look at homeownership.
Even as home price growth moderates, homeownership still feels expensive because the mortgage is no longer the whole story. The costs of living inside a home are rising and fluctuating, putting household budgets to the test.
For decades, housing affordability was measured mainly by principal and interest relative to income. Buyers and lenders focused on whether a mortgage payment fit within traditional debt-to-income ratios. Today, that metric feels incomplete. Prospective homeowners are asking a broader question: What will it cost to operate this home — consistently and predictably — month after month?
For buyers, that shift is reframing the conversation of resale homes versus new construction. New construction has the potential for more predictable costs. Predictable monthly costs give buyers confidence — and confidence is now a meaningful part of affordability.
The Expanding Cost of Ownership
Home price growth has slowed compared with the rapid appreciation earlier in the decade. According to the U.S. Federal Housing Finance Agency (FHFA), House Price Index, U.S. home prices rose 0.6% in November and were up 1.9% year over year compared with November 2024 — a far more modest pace than the double-digit gains many markets experienced just a few years ago.
These numbers suggest prices are stabilizing, but even when sale prices plateau, overall costs for homeowners are not necessarily easing.
Everyday housing-related expenses remain elevated. A recent Insurify analysis found that non-mortgage costs — including insurance, property taxes, utilities, and maintenance — average roughly $21,084 annually nationwide, or about 27% of the median U.S. household income.
According to a study from Bankrate.com, maintenance alone averages more than $8,800 per year, with utilities and energy costs adding much more. These recurring outlays have outpaced wage growth in many regions, reshaping how buyers assess affordability.
Even as home prices moderate, buyers still contend with insurance volatility, fluctuating utilities, repair exposure, commuting costs, and long-term upkeep — meaning the total cost of ownership can feel high, even when the sale price seems reasonable.
Predictability as the New Metric
In this environment, predictability has become a form of affordability. Buyers are increasingly prioritizing stable monthly cash flow over speculative appreciation.
Energy-efficient systems that reduce utility swings, shorter commutes that contain transportation expenses, and homes with fewer near-term capital expenditures are rising in importance. The question is no longer just whether a buyer can qualify for a mortgage, but whether they can comfortably sustain operating costs over time.
That is where the resale versus new construction calculus becomes more pronounced:
Older resale homes often carry embedded financial uncertainty.
Aging roofs, HVAC systems nearing end of life, and outdated plumbing or electrical systems can all disrupt household budgets with unexpected repair costs.
When labor and materials remain costly, surprise repairs carry meaningful financial weight.
2. New construction changes that equation.
Modern building standards, high-efficiency systems, improved insulation, and new appliances reduce the likelihood of near-term repairs.
Builder warranties provide a financial buffer during the first years of ownership.
Thoughtful site planning can also place new homes closer to employment centers and amenities, reducing commuting costs and stabilizing monthly outlays.
None of this eliminates cost pressure. Insurance premiums, taxes, and utilities still factor heavily into household budgets. But when sale prices stabilize and living costs remain elevated, buyers increasingly value cost clarity and predictability over marginal price differences.
Bottom Line
In 2026, affordability is no longer defined solely by purchase price or mortgage rate. It is defined by the reliability of the full financial picture. As home price growth stabilizes, predictability — not just price — is emerging as the new benchmark of what it means to be truly affordable.
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