The National Association of Realtors’ housing affordability index showed declining purchasing power for homebuyers during June, marking the fifth straight month of deterioration. The median single-family home price reached $446,400 while the average interest rate on a 30-year fixed mortgage stood at 6.57%, resulting in a required income of $109,152 to qualify for a mortgage with a 20% down payment.
The affordability decline has persisted since January, when the median home price was $398,200 and the required qualifying income was $93,552. However, Lawrence Yun, chief economist for the National Association of Realtors, noted that conditions had improved compared with the same period in the previous year. In June 2025, mortgage rates were higher at 6.9% and the necessary income to qualify exceeded $110,928. Yun attributed recent rate increases to geopolitical developments, particularly the onset of conflict in the Iran region, which sparked inflation concerns despite rates briefly dipping below 6% in late February.
Inflation has remained a headwind for consumer purchasing power, with the consumer price index showing a 3.5% annual increase that matches current wage growth, suggesting workers’ salary gains are being offset by rising costs. Yun indicated that affordability could improve as the market transitions beyond the busy spring and summer buying season, potentially offering buyers greater negotiating leverage. Further improvements may occur if mortgage rates decline toward earlier-year levels prior to geopolitical tensions.
While the median price of existing homes reached an all-time high of $440,600 in June, the pace of appreciation has slowed considerably. The June figure represented only a 1.8% increase compared with a year earlier, substantially below the double-digit annual gains witnessed during the pandemic housing boom. Regional variations persist, with the Midwest and South offering greater affordability than the Northeast and West.
New legislation may provide long-term relief, as the bipartisan 21st Century ROAD to Housing Act became law on July 11 with provisions designed to increase housing supply and improve affordability. The measure includes initiatives to encourage construction, expand financing access, and limit institutional investor purchases. Economists cautioned that benefits may take considerable time to materialize, given the shortage of more than 4 million homes nationwide.
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