Owning a home has never exactly been cheap. But over the past five months, each one has made it a little tougher.
The National Association of Realtors tracks affordability with an index, and that index slipped every month from February through June. The median price of a single-family home landed at $446,400 in June. That is up from $398,200 in January. For comparison, the all-time high for any existing home hit $440,600 in June.
So what does that mean in dollars and cents? A buyer putting 20% down and locking in a 30-year fixed mortgage at the June average rate of 6.57% would need to earn about $109,152 a year to qualify. Back in January, when rates were lower at 6.19%, the income needed was $93,552.
A year earlier, in June 2025, the situation was even worse in some ways. The average mortgage rate was 6.9%, and the income needed to buy was $110,928. But home prices have kept climbing since then, so the overall picture has not improved.
Two things drove this: mortgage rates and home prices. Rates rose after the Iran war started, and worries about inflation pushed them higher. At the same time, home prices typically climb from winter through mid-summer because more people are shopping.
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On the income side, workers got a 3.5% raise on average in June. That matched the inflation rate of 3.5%. So that raise essentially got eaten by higher costs on everything else.
Lawrence Yun, the chief economist at NAR, put it this way: compared with June 2025, "affordability [last month] was actually slightly better, as income growth outpaced home price appreciation and mortgage rates were modestly lower." One month of slight improvement does not undo five months of decline, though.
The bigger picture is a supply problem that goes back years. Realtor.com estimates the country is short more than 4 million homes. That shortage keeps prices high even when demand cools a bit.
There is some reason to hope, but no quick fix.
Yun expects "slight improvements in affordability as the market moves beyond the busy spring and summer buying season, giving buyers more negotiating power." After the summer frenzy fades, sellers often have to work harder to get a deal done.
He also said affordability could get better year-over-year if mortgage rates fall back to where they were before the Persian Gulf conflict. That "if" is doing a lot of work, though. Nobody knows when rates will start dropping again.
The government is trying to help. The 21st Century ROAD to Housing Act became law on July 11. The goal is to increase the supply of homes and restrict big institutional buyers from scooping up too many properties. Experts caution that it will take time for those changes to show up in the real world.
Mischa Fisher, the chief economist at Zillow, offered a tempered view: "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."
The bottom line: If you are looking to buy a home this year, you are not imagining the squeeze. Your income needs to be higher than it was just a few months ago. But the pace of price increases is slowing, and if rates cooperate later this year, the math could start working in your favor again. Patience, and a close eye on mortgage rates, might be the best tools you have right now.
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