The NAR measures housing affordability by comparing a typical mortgage payment to median household incomes. That payment represented 16.3% of average household income in June, the highest level since 2008.
Affordability is dropping, of course, because housing prices are still going up. However, housing price growth is now at its slowest pace since 2012, according to the NAR.
The median price for existing single-family homes increased in 71% of the markets measured by NAR in its latest quarterly survey, but there were fewer rising markets than in the first quarter, and 47 metro areas recorded lower prices than in the previous year.
Nationally, the median price for existing single-family homes in the second quarter was $212,400, a jump of 4.4% from the Q2 2013 average of $203,400.
“National median home prices began their most recent rise during the first quarter of 2012 but had climbed to unsustainable levels given the current pace of inflation and wage growth,” said NAR chief economist Lawrence Yun. “At this slower but healthier rate, homeowners can continue steadily building equity. Meanwhile, for buyers, increased supply with moderate price gains is giving them better opportunities to choose.”
Housing affordability hit a six-year low in June, according to a report released by the National Association of Realtors.