Affordability for homebuyers deteriorated in June for the fifth straight month, according to data from the National Association of Realtors’ housing affordability index. Based on a median single-family home price of $446,400 and an average 30-year fixed-rate mortgage at 6.57%, prospective buyers needed an annual income of $109,152 to qualify for a mortgage, assuming a 20% down payment.
The downward affordability trend began in January, when the median home price stood at $398,200, mortgage rates averaged 6.19%, and the required qualifying income was $93,552. However, affordability conditions showed improvement relative to the prior year. In June 2025, mortgage rates were higher at 6.9%, and buyers needed $110,928 in income to qualify. Lawrence Yun, chief economist for the National Association of Realtors, attributed the year-over-year improvement to income growth outpacing home price appreciation and modestly lower mortgage rates.
Mortgage rates had briefly dipped below 6% in late February before rising due to geopolitical tensions and inflation concerns. The latest consumer price index data showed annual inflation at 3.5%, matching the current annual growth rate in average hourly wages. This convergence means wage increases are being offset by inflationary pressures. Yun noted that home prices typically appreciate from winter through mid-summer as buying activity increases seasonally.
Looking ahead, economists anticipate modest affordability improvements as the spring and summer buying season concludes, potentially giving buyers greater negotiating leverage. Yun suggested that further year-over-year affordability gains could materialize if mortgage rates decline toward earlier-year levels. While the median price of existing homes reached an all-time high of $440,600 in June, the rate of price increases has decelerated significantly to 1.8% compared to a year earlier, well below pandemic-era double-digit gains. Regional variations persist, with the Midwest and South generally offering better affordability than the Northeast and West.
New legislation aimed at addressing housing supply emerged with the bipartisan 21st Century ROAD to Housing Act becoming law, combining measures to encourage construction and expand financing access. However, experts caution that substantial time may elapse before homebuyers experience meaningful benefits, given the estimated shortage of more than 4 million homes nationwide.
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