Search the real estate prices in any market and you're likely to discover a wide range of values, from decrepit residences you can buy for a song to palatial seven-figure mansions. Not surprisingly, most buyers are looking for a home that falls somewhere in the middle.

For the majority of American households, however, income caps the price they can pay at a quarter-million dollars or less. According to the National Association of Home Builders' most recent "Priced-Out Estimates" report, 52.5 percent of households in the United States are not able to purchase a home for more than $250,000. The report also found that small changes in home prices or mortgage rates can exclude many buyers from the market.

The NAHB analysis found that 25.4 million U.S. households did not have sufficient income to purchase any home for more than $100,000. Another 20 million could afford to spend between $100,000 and $175,000, while 17.7 million could spend between $175,000 and $250,000.

The report also determined that a $1,000 increase in the median price of a newly built home, which stood at $344,652, would exclude 158,857 households from being able to afford this type of property. Approximately 44 million U.S. households, or 35 percent, were able to afford a median priced new home.

An increase in interest rates would have a more pronounced effect. NAHB estimated that raising the average rate of a 30-year fixed rate mortgage a quarter-point from 3.75 percent would price out 1.3 million households.

NAHB based its calculations on household income as well as homeownership costs including mortgage payments, homeowners insurance, and property taxes. It defined an affordable home as one where the costs did not exceed 28 percent of the household income.