Affordability Index (Payment-to-Income Pressure)
Indicator Overview: The housing affordability index compares typical mortgage payments to household incomes. An index above 100 means a median-income family can afford a median-priced home with a 20 % down payment; below 100 signals affordability stress. The National Association of Realtors reports that affordability hit a decade low in mid‑2025 as mortgage rates and prices rose.
Six‑Month Trend: Over the last six months, rising interest rates and home prices have pushed the affordability index down by roughly five points, leaving fewer households able to qualify for mortgages. States with robust job growth but limited inventory saw the sharpest declines.
Six‑Month Forecast: Analysts expect only modest relief. Lower mortgage rates could stabilize the index, but if home prices continue climbing due to scarce inventory, affordability will remain constrained. Policy support or increased housing supply could improve conditions slightly by late 2026.
Chart: See our interactive chart on the main Real Estate Market Indicators page.
