A key measure of US housing affordability worsened for the first time in almost three years, as higher borrowing costs soaked up a bigger chunk of earnings for new homebuyers. Monthly payments on a median-priced $410,700 home accounted for 34% of a typical family's income in the second quarter of this year, according to data published Thursday by the National Association of Home Builders and Wells Fargo. That's up from 32% in the first quarter, and it reverses part of the most recent improvement recorded since early 2025. Thirty-year mortgage rates climbed steeply in the period, as the US war with Iran drove borrowing costs higher across the economy, and they're now close to a one-year high at around 6.8%. A 2% increase in median new-home prices during the quarter added to the squeeze, the builders association said. The NAHB data is based on a median family income of about $107,000; households earning half of that amount had to spend 67% of their earnings to cover the same new home's mortgage costs.
Wells Fargo & CompanyWells Fargo co-published the NAHB affordability index, which shows worsening housing affordability due to higher mortgage rates and prices, potentially reducing demand for mortgages and related services.
