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Despite slowing home price growth, buying a house is becoming increasingly difficult.
Homebuyer affordability slipped in June for the fifth consecutive month, according to the National Association of Realtors’ latest housing affordability index.
Based on a median single‑family home price of $446,400 and an average 30‑year fixed mortgage rate of 6.57%, the income required to qualify for a mortgage was $109,152 last month, the index shows. The calculation assumes a 20% down payment.
Affordability has been declining since January, when the median home price was $398,200, the average rate was 6.19% and the required qualifying income was $93,552, the index indicates.
Compared with June 2025, “affordability last month was slightly better, as income growth outpaced home‑price gains and mortgage rates were modestly lower,” said Lawrence Yun, NAR’s chief economist. In June 2025, rates were higher at 6.9% and required income was $110,928.
Mortgage rates fell below 6% in late February, but the start of the Iran war and rising inflation drove them higher, experts said.
The latest inflation reading, based on the consumer price index, showed an annual increase of 3.5%, the Bureau of Labor Statistics reported. This matches the current annual growth in average hourly wages, meaning workers’ pay gains are being offset by inflation.
Home prices typically rise from winter through mid‑summer as buying activity ramps up, Yun noted.
How homebuyer affordability could change
Looking ahead, “we expect slight improvements in affordability as the market moves beyond the busy spring and summer buying season, giving buyers more negotiating power,” Yun said.
“On a year‑over‑year basis, affordability could improve further if mortgage rates ease back toward the levels seen at the beginning of the year, before the Persian Gulf conflict,” Yun said.
The median price of an existing home of any type hit a record $440,600 in June—49.2% higher than in June 2020—but price growth has slowed, NAR data shows. June’s median is 1.8% above a year earlier, well below the double‑digit annual gains seen during the pandemic housing boom.
Affordability varies across markets. In general, the Midwest and the South are more affordable than the Northeast and the West, according to the NAR index.
“Buyers in most markets will find prices still climbing, but at a pace that leaves more room for incomes to catch up than in prior years,” said Mischa Fisher, Zillow’s chief economist, in a recent blog post.
Meanwhile, the bipartisan 21st Century ROAD to Housing Act, signed into law on July 11, aims to boost housing supply and improve affordability. It combines dozens of measures intended to encourage home construction, expand financing access, and limit purchases by large institutional investors.
However, experts say it may be some time before homebuyers see tangible benefits. A shortfall of more than 4 million homes, according to Realtor.com, means many economists believe it will take years to reverse the deficit.
