According to the National Association of Realtors’ housing affordability index, the ability for prospective homebuyers to qualify for mortgages continued to deteriorate in June. The median single-family home price stood at $446,400, while the average 30-year fixed mortgage rate reached 6.57%, resulting in an income requirement of $109,152 to qualify for a mortgage assuming a 20% down payment.
The affordability decline has persisted since January, when median home prices were $398,200, rates averaged 6.19%, and the required qualifying income was $93,552. Lawrence Yun, chief economist for the National Association of Realtors, noted that year-over-year comparisons tell a different story. When compared to June 2025, affordability actually improved slightly because wage growth outpaced home price increases and mortgage rates were lower than the 6.9% recorded a year earlier, which had required $110,928 in income.
Mortgage rates had briefly dipped below 6% in late February before climbing higher following geopolitical developments. Inflation, as measured by the consumer price index, rose 3.5% annually, matching the rate of wage growth, suggesting that income gains are being offset by rising costs. Additionally, home prices characteristically increase from winter through midsummer as buying activity peaks seasonally.
Looking ahead, Yun predicted modest affordability improvements as the market transitions past the busy spring and summer buying season, potentially granting buyers greater negotiating leverage. Further improvements could occur if mortgage rates decline toward early-year levels. While median existing home prices reached an all-time high of $440,600 in June—49.2% above June 2020 levels—the pace of annual increases has slowed to 1.8%, far below pandemic-era double-digit growth rates.
Regional variations exist, with the Midwest and South generally offering more affordable options than the Northeast and West. The bipartisan 21st Century ROAD to Housing Act, which became law July 11, aims to boost housing supply through measures encouraging construction, expanding financing access, and restricting purchases by large institutional investors. However, experts caution that benefits may take considerable time to materialize given the estimated shortage of over 4 million homes.
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