A frozen housing market thaws two ways: incomes rise into prices, or financing costs fall into payments. Set the speed of each clock and see when a median family can afford the median home again.
Starting position, September 2026: median existing home $434,100; 30-year fixed 6.71%; home prices +2.1%/yr; wages +3.2%/yr; CPI +3.4%/yr. Sources below.
Each year, a prospective buyer purchases the median home at that year's price with 20% down on a 30-year fixed mortgage at that year's rate, plus property tax and insurance of 1.7% of the home's value per year. The home price and median family income compound at the growth rates set above. The mortgage rate glides linearly from today's 6.71% to the four-year value, then holds.
Gross mode calls the market thawed when the total monthly payment falls to the affordability bar as a share of gross monthly income — the front-end ratio a lender underwrites. Residual mode deducts essential non-housing spending, set at half of income today and growing with inflation, and applies an equivalent bar to what remains. The two modes agree today by construction; they diverge whenever inflation and wage growth diverge, because a household decides on what is left over, not on what it grosses.
The income clock reads the annual gap between income growth and home-price growth in the selected denominator. The rate clock reads the annualized change in the mortgage payment per dollar of house over the four-year rate glide. A needle left of zero means that clock is running backwards.
Constant growth rates are a simplification — the labor-shock preset in particular compresses a front-loaded decline into a steady rate. The instrument is for orders of magnitude and direction, not point forecasts.