US housing affordability worsened in the second quarter of 2026, marking the first decline since 2023. According to data from the National Association of Home Builders (NAHB) and Wells Fargo, monthly mortgage payments for a median-priced home, which stood at $410,700, now account for 34% of a typical household's income. This represents an increase from 32% in the first quarter of the year, indicating a reversal of affordability improvements seen since early 2025.
This decline in affordability is attributed to persistently high mortgage rates and rising home prices. While the median price of an existing home reached an all-time high of $440,600 in June, increasing by 1.8% year-over-year, the income needed to qualify for a mortgage on a median-priced single-family home of $446,400 was $109,152 in June. This is based on an average 30-year fixed-rate mortgage of 6.57% and a 20% down payment, according to the National Association of Realtors' housing affordability index.
The National Association of Realtors (NAR) reported that homebuyer affordability has slipped for five consecutive months as of June 2026. However, NAR Chief Economist Lawrence Yun noted that affordability in June was slightly better compared to June 2025, when rates were 6.9% and $110,928 in income was needed to qualify. Experts predict slight improvements in affordability moving forward as the market exits the busy spring and summer buying season, potentially giving buyers more negotiating power. Future improvements could also come if mortgage rates ease back to levels seen earlier in the year before the Persian Gulf conflict.
