This chart shows how housing affordability has plunged across the US

• US housing affordability has sharply eroded over the last several years.
• High interest rates and home prices, as well as rising insurance costs, have spread to every state in the country.

Thanks to high mortgage rates, elevated home prices and rent payments, as well as rising insurance costs amid extreme weather events, Americans are facing a historic lack of affordability in the housing market.

The ability for a family to own own a home is at a decade-low, data from the National Association of Realtors shows, and a Thursday report from Moody's showed that the same data taken on a state-by-state basis reveals that a typical family in 2023 cannot afford a new mortgage on a median-priced home in about a dozen states, up from just two states in 2019.

A reading of 100 on Moody's estimated housing affordability index means a family with a median income for that state has exactly enough income to afford a new mortgage for a median-priced home in that state.

Every state in the US has worsened on this metric over the last four years, as depicted in the chart below.

"This is poised to have negative credit effects, including slower population growth and/or population out-migration, reduced consumer spending, greater inequality and increased homelessness, all of which curb state revenue growth and create expenditure pressure," Moody's strategists wrote.

States facing particular affordability challenges include Oregon, Washington, Colorado, Florida, Massachusetts, New York, Hawaii, and California. In the last decade, Moody's said, Florida, Idaho, and Nevada saw the steepest declines in affordability, largely fueled by an influx of new residents and housing demand.

Rental burden has also worsened over recent years. Strategists pointed out that the number of states with a rent-to-income ratio above 20% has increased from five states to nine between 2019 and 2023.

Americans' average rent payments jumped to $2,047 in September, per Zillow, a 3.2% year-over-year increase.

Meanwhile, extreme weather events, construction inflation, and excessive litigation, Moody's strategists said, have made insurance more expensive. For example, data from the Insurance Information Institute shows that in Florida, the average annual home-insurance premium has tripled between 2018 and 2023.

Premiums have also spiked in Arizona, California, Colorado, and Utah.

These headwinds to housing market affordability, in Moody's view, will ultimately have negative implications for credit.

"Socioeconomic effects resulting from affordability challenges are credit negative, because they can hamper state economic and tax revenue growth, while simultaneously ramp up state spending," the strategists said.