
At the national level, housing affordability increased in June, according to NAR's Housing Affordability Index, as strong wage growth and lower mortgage rates offset home price increases from a year earlier. However, affordability remained below 100 for the second consecutive month, with the index at 94.4.
Compared to one year ago, affordability improved in June, even though the monthly mortgage payment rose by 1.0%, as median family income increased by 4.1%. Mortgage payments went up due to higher home prices in June. However, mortgage rates fell 10 basis points from one year ago (one percentage point equals 100 basis points). Specifically, the effective 30-year fixed mortgage rate was 6.90% this June, compared to 7.00% one year ago. The median existing-home sales price increased 2.0% ($441,500) compared to one year ago ($432,900).
Compared to the prior month, the monthly mortgage payment rose by 3.0% and the median price of single-family homes also increased by 3.0%. The monthly mortgage payment went up by $67 compared to last month.



The national index is currently below 100, indicating that the average family earns less than what is needed to afford a median-priced home. An index above 100 shows that a family with the median income has more than enough to afford a median-priced home. The income needed to qualify for a mortgage, known as the qualifying income, is the amount required so that mortgage payments on a 30-year fixed loan with a 20% down payment make up 25% of the family’s income.
The Midwest was the most affordable region, with an index of 118.7 (median family income of $102,419 and a qualifying income of $86,256). The West was the least affordable, with an index of 69.0 (median family income of $113,783 and a qualifying income of $164,832). The South was the second most affordable region, with an index of 101.1 (median family income of $97,812 and a qualifying income of $96,720). The Northeast was the second least affordable, with an index of 81.1 (median family income of $114,559 and a qualifying income of $141,264).
A mortgage is considered affordable if the monthly mortgage payment (principal and interest) is 25% or less of the family’s income.



Housing affordability improved in all four regions compared to last year. The South experienced the largest gain at 4.8%, followed by the West with a 3.6% increase. The Midwest saw a 1.5% rise, and the Northeast had a modest 0.5% increase.
However, affordability declined in all four regions from the previous month. The Northeast faced the biggest drop at 5.9%, followed by the Midwest with a 3.0% decrease. The South declined by 1.7%, and the West by 1.0%.
Compared to a year ago, the average monthly mortgage payment increased from $2,304 to $2,326, a 1.0% rise. Meanwhile, the annual mortgage payment as a share of income decreased to 26.5% this June from 27.3% last year.
Regionally, the West has the highest mortgage payment-to-income ratio at 36.2%. The Northeast follows with 30.8%, then the South at 24.7%. The Midwest has the lowest at 21.1%. Mortgage payments are generally not burdensome if they are no more than 25% of income.
Home price growth continues to reach new record highs, with qualifying incomes steadily rising. Mortgage rates stayed the same as last month, which benefits potential homebuyers. As rates decrease, so should the monthly costs of owning a home. Last week, the Mortgage Bankers Association reported a 3.1% increase in mortgage applications compared to the week before.
The Housing Affordability Index calculation assumes a 20% down payment and a 25% qualifying ratio (principal and interest payment to income). See further details on the methodology and assumptions behind the calculation.