Wages outpaced home prices in June, lifting the housing affordability index
Lawrence Yun, chief economist for NARThe United States housing market delivered a counterintuitive result in June: the national median home price reached an all-time high, yet housing affordability improved year over year for the first time in more than 12 months.
The National Association of Realtors (NAR) reported that the median existing-home sale price climbed to $440,600 in June 2026, a 1.8% year-over-year gain and a national record.
Despite that milestone, NAR's Housing Affordability Index (HAI) — which measures whether a household earning the US median family income can qualify for a mortgage on a median-priced home — rose to 102.3, up from 95.5 in June 2025.
A score above 100 means that family earns more than enough to qualify, assuming a 20% down payment.
Read more: Homeowners stuck between reverse and conventional loans are a growing broker opportunity
What's driving the affordability rebound
The improvement rests on two pillars. US wages grew at an annual rate of 3.5%, according to Bureau of Labor Statistics data, nearly double the 1.8% rise in home prices.
Separately, the average 30-year fixed mortgage rate fell to 6.49% in June from 6.82% a year earlier, per Freddie Mac's Primary Mortgage Market Survey, easing monthly costs for qualifying borrowers.
The index has now declined for five consecutive months since reaching a nearly four-year high of 116.5 in January 2026, a window that is still open but slowly narrowing.
Regional results underscored that unevenness. The well-supplied West led all four regions with an 8.9% year-over-year affordability gain, followed by the South at 8.3% and the inventory-constrained Midwest at 6.2%.
The Northeast was the exception, where home prices rose 3.9% against regional wage growth of just 3.2%, producing the smallest improvement nationally.
For brokers qualifying buyers on single-family homes, NAR's methodology, based on a $446,400 median at a 6.57% rate, put the income required to qualify at $109,152 in June.
Read more: Home price growth to fall behind inflation, Realtor.com forecast shows
A new housing law enters the picture
The 21st Century ROAD to Housing Act automatically became law on July 11, after clearing the Senate 85-5 and the House 358-32, adding a legislative variable to the long-term affordability equation.
The bipartisan package bundles nearly 50 housing measures, from increasing supply and expanding financing access to curbing large institutional purchases of single-family homes.
Realtor.com estimates the US faces a housing supply deficit of approximately 4 million homes, and most experts say meaningful relief will take years to materialize.
Lawrence Yun, chief economist for NAR, said further improvement is possible "if mortgage rates ease back toward the levels seen at the beginning of the year, before the Persian Gulf conflict." That was when the 30-year rate briefly dipped below 6% in late February 2026 before geopolitical tensions pushed borrowing costs higher.
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