Overview

• The IW Köln-Interhyp index sets 100 as the threshold where mortgage payments equal 35 percent of net income for a model household of two earners aged 30–40 with two children
• Affordability improved in 392 of 400 districts from April 2023 to April 2025, driven by modestly lower interest rates, rising incomes and still‐moderate price levels
• Most rural areas and smaller cities now exceed the affordability threshold, while Bavaria, Berlin, Hamburg and all seven largest German cities continue to face mortgage burdens above 35 percent of net income
• Holzminden leads as the most affordable municipality with an index of 174, contrasted by the Tegernsee-area Landkreis Miesbach at the bottom with a value of 52
• IW Köln and Interhyp experts recommend targeted credit support measures alongside stepped-up new-build incentives to close regional gaps and curb future price and rent growth