US Housing Affordability Worsens to New Record Low on High Rates

US housing affordability worsened to a fresh record low in August as Americans continue to bend under the weight of soaring mortgage rates and sticky prices.

The National Association of Realtors index decreased to 91.7 in August, marking the lowest level in data back to 1989, according to data out Friday. A level below 100 means a household with a median income doesn’t earn enough to qualify for a mortgage on a median-priced home.

us housing affordability declines

The typical family spent 27.3% of their income on their annual mortgage payment. Qualifying income for a mortgage, based on a 20% down payment, was $107,232 in August — marking the third straight six-figure reading. Affordability deteriorated in all four regions.

“The highest mortgage rate in two decades is detrimentally limiting the homeownership opportunity for many middle-class households,” Lawrence Yun, NAR’s chief economist, said in an emailed statement. “Unintentionally, no doubt, the Federal Reserve is widening social inequality with only the high-income families — earning above $100,000 — able to comfortably buy a home.”