US homebuyer affordability weakens for fifth month as rates weigh

US homebuyer affordability deteriorated in June for a fifth consecutive month, according to the National Association of Realtors, as higher prices and mortgage rates lifted the income needed to qualify for a typical loan. NAR’s housing affordability index put the required annual income for a mortgage on a median-priced single-family home at $109,152, based on a $446,400 price, a 6.57% average 30-year fixed mortgage rate and a 20% down payment.

The monthly decline extends a shift that began after January, when NAR said the median single-family home price was $398,200, the average mortgage rate was 6.19% and the qualifying income was $93,552. The index measures whether a household earning the median income has enough income to qualify for a mortgage on a median-priced home under standard assumptions. When prices or borrowing costs rise, the income threshold rises with them.

Affordability was still modestly better than a year earlier, according to NAR chief economist Lawrence Yun. He said income growth exceeded home-price appreciation and mortgage rates were slightly lower than in June 2025, when the average rate was 6.9% and buyers needed $110,928 in income to qualify.

Mortgage costs remain a central constraint for buyers because the interest rate sets the monthly payment on the loan balance after the down payment. A higher rate reduces the amount a household can borrow at a given income level, or forces the buyer to allocate more income to the same home price.

Inflation and wages limit relief

The latest consumer price index showed a 3.5% annual increase, according to the Bureau of Labor Statistics. BLS data also showed average hourly wages growing at a 3.5% annual pace, a combination that indicates wage gains have been broadly matched by inflation.

Mortgage rates had fallen below 6% in late February before moving higher, with experts cited by CNBC pointing to inflation concerns linked to the Iran war. Seasonal price patterns also worked against buyers in June. Yun said home prices tend to rise from winter into mid-summer as purchasing activity increases.

NAR separately reported that the median price of an existing home of any type reached a record $440,600 in June. That was 49.2% above the level in June 2020 and 1.8% higher than a year earlier, a pace well below the double-digit annual increases recorded during the pandemic housing boom, according to NAR data.

Regional differences and policy response

Affordability varies materially by region, according to NAR’s index. The Midwest and South are generally more affordable than the Northeast and West, reflecting differences in prices, local incomes and housing supply.

Zillow chief economist Mischa Fisher wrote in a recent blog post that buyers in many markets are still facing rising prices, although the slower rate of appreciation leaves more scope for incomes to catch up than in recent years.

Yun said NAR expects some affordability improvement after the spring and summer buying season, when buyers may gain more bargaining power. He also said affordability could improve on a year-over-year basis if mortgage rates move closer to levels seen at the start of the year, before the Persian Gulf conflict.

Federal housing policy has also entered the debate. The bipartisan 21st Century ROAD to Housing Act became law on July 11 and is designed to increase supply and address affordability through measures intended to encourage construction, expand financing access and limit purchases by large institutional investors.

Any effect on buyers may take time, according to experts cited by CNBC. Realtor.com estimates the US has a shortage of more than 4 million homes, and many economists say reversing that deficit will require an extended period.

This story draws on original reporting from CNBC.