A basic human necessity, housing is a vital sector affecting societal health. A given area’s housing affordability, roughly defined as housing prices relative to wages, impacts nearly every other economic issue, from business competitiveness to household well-being. For employers, affordable housing is a crucial factor in attracting and retaining workers, especially in a labor market characterized by increasing mobility and intense competition for talent. For households, purchasing a home is often the single largest financial commitment, with monthly payments determining how much income is left for other expenses. For policymakers and researchers, housing affordability provides insight on broader market forces, including supply chain disruptions, migration patterns and monetary policy’s economic effects.
Because housing markets are heterogenous and localized, cost pressures related to housing tend to vary widely from county to county and region to region, even within the same state. A county that looks affordable in isolation may be relatively expensive when compared with its geographic and economic neighbors, revealing price pressures stemming from existing infrastructure, amenity-driven demand, supply constraints or a combination of these kinds of factors. Considering housing’s distinctly local characteristics, the Kenan Institute has developed a housing affordability index for North Carolina that shows relative housing affordability levels in every North Carolina county. This index and interactive maps allow users to view and compare current county-level affordability metrics and see how these measures have changed over time.
Measuring Housing Affordability: An Intuitive Index
Housing affordability primarily depends on three factors: the price of homes, mortgage rates and household income. Our index incorporates these elements in an easy-to-interpret measure of the financial burden of purchasing a home for the median household.
We construct the index by comparing the monthly payments on a median-priced home with the median household income in a specific area. We use 30% of median household income (aligned with the Department of Housing and Urban Development’s definition of affordable housing1) and divide by the estimated mortgage payment on a standard 30-year fixed-rate mortgage for a median-priced home, assuming a 20% down payment. We also include standard county-specific property taxes in the monthly payment, as they are an important component of the overall cost. The resulting ratio is then multiplied by 100, centering the index around a value of 100. The greater the index value, the more affordable an area’s housing: Values above 100 indicate that monthly payments account for less than 30 percent of income, and values below 100 indicate that payments exceed this benchmark. While not a measure of whether any one household can afford to buy a home, this index is a point-in-time measure of housing costs’ strain on a typical household’s finances.
We draw on several widely used data sources to construct our housing affordability model. Home prices are measured using Zillow Home Value Indexes for typical single-family homes.2 Household income comes from the US Census Bureau’s American Community Survey,3 supplemented with more timely wage growth measures from the Bureau of Labor Statistics’ Quarterly Census of Employment and Wages.4 Mortgage interest rates are based on Freddie Mac’s 30-year fixed-rate mortgage series.5 Property tax rates are collected from the North Carolina Department of Revenue.6 These inputs allow us to consistently track affordability over time for all North Carolina counties.
Statewide Trends: From Postcrisis Relief to Pandemic Pressures
Statewide, North Carolina’s housing affordability arc reflects shifting market conditions over the past 15 years. Following the housing market bust of the Great Recession, the 2010s were marked by subdued home price growth and historically low interest rates. This combination made homeownership affordable for many households as incomes gradually recovered.
Then the COVID-19 pandemic dramatically changed this environment. Disruptions to supply chains made building materials scarce and expensive, limiting new housing supply. Meanwhile, demand surged. Expansionary fiscal policy, reduced spending on in-person services, and rising household savings increased the ability and willingness of households to purchase homes. North Carolina, already an attractive destination for domestic migration, saw a surge of new residents who helped drive particularly strong demand, contributing to an acceleration in home prices beginning in 2021.
The Federal Reserve began raising interest rates in 2022 and continued raising rates in 2023 to combat high, broad-based inflation, which made buying a new home even more expensive. Higher mortgage rates translated directly into higher monthly payments, even for buyers facing unchanged home prices. Many existing homeowners became reluctant to sell and give up their low-interest-rate mortgages, further constraining supply.
By the end of 2022, our statewide affordability index dipped below 100, signaling that the median household could no longer afford the median-priced home, using the 30% income benchmark. Since then, conditions have modestly improved. As interest rates and demand pressures eased, the index rose from 84 in November 2023 to 96 as of June 2025. Even so, home ownership requires a substantial upfront down payment, and mortgage payments take up a larger share of income than they did for most of the 2010s.
Affordability Across North Carolina Counties
Note: Interactive maps perform best when used in full-screen mode.
Beneath statewide trends, housing affordability varies substantially from county to county. The least affordable counties are concentrated in North Carolina’s mountains and coastal regions, where limited housing supply compounds with strong demand driven by natural amenities, tourism and second-home purchases.
Watauga County, a mountain county that is home to Boone, has the lowest housing affordability in the state. Payments on the median home there amount to over 60 percent of median household income, corresponding to an index value under 50. In many mountain and coastal counties, however, a significant share of homeowners earn income elsewhere or are purchasing second homes. This effect creates housing markets that are fundamentally different from those in many Piedmont counties, where owner-occupied primary residences dominate.
At the other end of the spectrum, the most affordable counties are largely noncoastal counties in Eastern North Carolina. While a high affordability index value may seem an unambiguous positive, it may also signal weak housing demand stemming from slow economic growth, population decline or limited job opportunities.
Local Affordability Over Time
Note: Interactive maps perform best when used in full-screen mode.
Among the most striking findings from the index is that housing affordability has deteriorated in every county in North Carolina over the past five years. The magnitude of this decline in affordability, however, varies considerably from place to place. Lenoir County experienced the largest fall in affordability, while Chatham County saw the smallest drop in this period.
Counties that are currently the least affordable tend to be historically expensive, even before the pandemic. This pattern indicates that recent developments have most often intensified existing patterns rather than reversing them. Yet some counties illustrate meaningful transitions. Alamance County, for example, has shifted from being a relatively affordable county to the most expensive county in the Piedmont Triad, likely reflecting its integration with the fast-growing Triangle region. Buncombe and New Hanover counties have long been expensive, but their affordability deteriorated more slowly than in many surrounding counties, suggesting that rapid price growth spread outward from these more established hubs.
Note: Interactive maps perform best when used in full-screen mode.
Conditions across the state have recently begun to shift. In the past year, housing became more affordable in 92 of North Carolina’s 100 counties. Rural counties in Eastern North Carolina saw some of the largest gains, while affordability worsened in parts of the Virginia Beach region and the Yadkin Valley. Early data for 2025 are encouraging as well. National home price growth has slowed, wage growth has remained solid in both the US and North Carolina, and interest rates have eased, pointing toward further, if gradual, improvements in affordability.
What the Index Can (and Cannot) Tell Us
This housing affordability index is designed to be transparent and interpretable, making it useful for businesses, researchers, and the public. By capturing how shifts in prices, interest rates and income together shape the cost burden of homeownership, the index allows for consistent comparisons of counties and affordability levels over time.
The index is best understood as a high-level summary of housing market pressures rather than a measure of housing access for all residents. Its focus on the median household and the median home means it does not capture variation along the income distribution, and it excludes some common housing expenses such as property insurance.
By anchoring the analysis to a straightforward and intuitive metric, the index offers a coherent way to discuss housing affordability in North Carolina. As the state continues to grow, tracking housing affordability helps to inform business decisions, academic research and policy with the aim of ensuring that economic growth remains broadly accessible.
