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Even as home price gains have slowed, buying a house doesn’t appear to be getting any easier.
Homebuyer affordability slid in June for the fifth consecutive month, according to the National Association of Realtors’ latest housing affordability index.
Based on the median price of a single-family house, $446,400, and the average interest rate on a 30-year fixed-rate mortgage of 6.57%, the income needed to qualify for a mortgage was $109,152 last month, according to the index. The formula also assumes the buyer makes a 20% down payment.
Affordability has been sliding since January, when the median home price was $398,200, the average rate was 6.19% and the income needed to qualify for a mortgage was $93,552, according to the index.
However, compared with June 2025, “affordability [last month] was actually slightly better, as income growth outpaced home price appreciation and mortgage rates were modestly lower,” said Lawrence Yun, chief economist for NAR. In June 2025, rates were higher — 6.9% — and $110,928 in income was needed to qualify for a mortgage.
Mortgage rates had dipped below 6% in late February, but the onset of the Iran war and the accompanying specter of inflation pushed rates higher, experts say.
The latest inflation reading, based on the consumer price index, showed an annual increase of 3.5%, according to the Bureau of Labor Statistics. That matches the current annual growth in average hourly wages, BLS data shows, which generally means workers’ pay increases are getting eaten up by inflation.
Additionally, home prices typically rise from winter to mid-summer as buying activity increases, Yun said.
How homebuyer affordability could change
Going forward, “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.
While the median price of an existing home of any type reached an all-time high of $440,600 in June — 49.2% higher than in June 2020 — increases in prices have slowed, according to NAR data. June’s median is 1.8% higher than a year earlier — far below the double-digit annual increases seen during the pandemic housing boom.
Additionally, some markets are more affordable than others. Generally speaking, 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, chief economist for Zillow, in a recent blog post.
Meanwhile, the bipartisan 21st Century ROAD to Housing Act, which became law July 11 and is intended to increase the housing supply and address affordability, combines dozens of measures aimed at encouraging home construction, expanding access to financing and restricting purchases by large institutional investors.
However, experts say it could be some time before homebuyers see benefits. There’s a shortage of more than 4 million homes, according to Realtor.com, and many economists say it will take time to reverse that.
