The National Association of Realtors recently released new data showing many homebuyers found it slightly more difficult to afford a house purchase in June.
The group's Housing Affordability Index indicates how likely it is for a typical family — one earning the median family income as reported by the U.S. Census Bureau — to qualify for a mortgage loan on the current national median-priced single-family home.
The index came in at 93.3 for June, edging down from 93.5 in May. An affordability rate below 100 signifies that the typical family in the U.S. does not earn enough to afford a median single-family house with the current mortgage rates. If the rate is exactly 100, a family has the income required to buy a home in the current market, while a rate over 100 means the typical family earns more than needed to purchase a home.
The National Association of Realtors has been tracking the affordability of typical houses for a single family since 1989. Nadia Evangelou, senior economist and director of real estate research at the National Association of Realtors, told CoStar that more people tend to buy houses in the spring and summer months, stirring competition that can elevate prices. Interest rates in June also remained higher than they had been in recent years.
“Because of the seasonality trends, we see that home prices are higher in the summer months compared to winter months,” Evangelou said. “Affordability depends on the value of the home and the mortgage rate.”
Some relief may be coming. Last week, mortgage rates fell below 6.5% for 30-year mortgages and under 5.7% for 15-year mortgages, according to data from mortgage finance giant Freddie Mac. A drop in rates could take some of the sting out of median home prices that have risen to almost $430,000.