Most German Homebuyers See Affordability Worsen Despite a Stable National Index

The latest Interhyp-IW Affordability Index, covering all 400 German districts, shows that the national picture for single-family home buyers has barely budged—but that masks a sharp deterioration in most regions. At 103 points in June 2026, the index suggests a typical two-income family with children spends roughly 34% of its net income on mortgage payments, just inside the 35% threshold considered affordable.

Yet in 251 of the 400 counties, affordability actually declined over the past year. Interhyp CEO Jörg Utecht explains that rising wages have been canceled out by higher interest rates and home prices, keeping the headline figure in a narrow 103–107 band since early 2025. “Waiting hasn’t paid off for most people,” he says.

The most eye-catching gains appear in classic automotive cities—Wolfsburg, Ingolstadt, Schweinfurt, Stuttgart and the Eichstätt district. Their index scores jumped 6–8% over two years, but not because locals are earning more. Weaker economic prospects in the auto industry are dampening demand, making homes cheaper in relative terms. Young families, Utecht notes, “are now thinking twice about buying a house in a car-manufacturing town.”

In the top seven metropolises, the burden remains extreme: buyers must earmark 44% of net income for the monthly rate, far above the comfort zone. Only modest price declines in Munich (down 2%) and stagnation in Berlin offered marginal relief. Outside those hotspots, however, the index climbs to 118, meaning a mortgage consumes just 31% of income—a marked advantage for buyers willing to look beyond the city limits.

The Auto Downturn’s Hidden Toll on Housing and the Energy-Class Calculus

The Mixed Signal from Auto Cities

A rising affordability index normally signals improving conditions for purchasers. In Wolfsburg, Schweinfurt, Ingolstadt, Stuttgart and Eichstätt, however, the opposite is true. The 6–8% increase in the score over the past two years is driven not by income growth but by sagging demand. As the auto industry struggles, local economies weaken and would-be buyers grow cautious. “You have to read the numbers carefully,” says Prof. Michael Voigtländer of the IW. “What looks like a bargain may actually be a warning sign.”

In practice, this means a family buying in Wolfsburg might secure a monthly payment equal to just 32% of its income—below the 35% threshold—but with the risk that further deterioration in the car sector could erode the property’s long-term value. The index improvement is, in effect, a discount for economic uncertainty.

Why Energy Class D Could Be the Smart Compromise

The study also reveals a growing price gap linked to energy performance. Homes rated D currently sell for about 9% less than top-rated A+/A/B properties in cities with over 100,000 inhabitants. The discount is smaller in metropolitan areas, where the power of location overshadows the energy label, but the trade-off is still significant.

Voigtländer argues that D-class houses occupy a middle ground: “The purchase price is lower than for a highly efficient building, while the renovation risk is more calculable than for the lowest classes.” The key question—whether the lower purchase price outweighs higher heating and eventual upgrade costs—can only be answered by a thorough technical inspection, as Utecht emphasizes.

Policy Levers That Could Shift the Market

Voigtländer points to two potential measures that could ease the pressure on buyers. The planned introduction of “Gebäudetyp E” is designed to make construction cheaper, potentially increasing supply. He also backs a tax-free allowance on property transfer tax (Grunderwerbsteuer) for first-time buyers. Such a flat allowance, he says, would have a bigger proportional impact on homes in the commuter belt than on expensive urban properties, helping to steer demand outward and relieve the most overheated markets.

Your Game Plan: Where to Look, What to Compromise On, and What to Watch Out For

  • Don’t wait for better times. The affordability index worsened in 251 of 400 districts in the past year, and experts see little room for broad improvement as wages and interest rates largely offset each other. A delay is more likely to cost opportunities than to bring a better deal.
  • Look beyond the Top-7 cities. In non-metropolitan areas, the index sits at 118 points—a household spends just 31% of net income on mortgage payments, well within the 35% affordability threshold. That’s a 14-percentage-point saving compared with Berlin or Munich, where the burden is 44%.
  • Consider a D-rated home. In cities above 100,000 residents, these properties sell for a 9% discount to highly efficient homes. Renovation costs are easier to forecast than for the lowest classes. Always commission a technical survey to confirm that the price advantage isn’t eaten up by hidden defects or future energy bills.
  • If you’re eyeing a car-manufacturing hub, be cautious. Rising affordability in Wolfsburg, Ingolstadt and Stuttgart reflects shrinking demand, not economic resilience. A cheaper home today could mean a tougher resale environment if the auto slump persists. Weigh the bargain against your own job security in the sector.
  • Keep track of potential tax relief. A mooted tax-free allowance on property transfer tax could save a first-time buyer thousands of euros, especially on properties in the commuter belt where the proportional benefit is greatest. While not yet law, it would immediately improve upfront affordability for those buying outside the priciest city centers.