Home buying got measurably less brutal in July. The National Association of Realtors’ Housing Affordability Index climbed to 103.3, up five full points from 98.3 a year earlier, even as the average 30-year mortgage rate held above 6.5%. It’s the kind of year-over-year gain the index hasn’t produced in more than a year.
Key Points
- NAR’s Housing Affordability Index hit 103.3 in July, meaning a family earning the median income now has slightly more than 100% of the income needed to qualify for a mortgage on a median-priced home — a threshold the index had struggled to clear.
- That’s up five points year-over-year from 98.3, according to NAR’s own housing statistics data.
- The gain comes despite a median existing-home price of $434,100, up 2.0% annually, and a 30-year mortgage rate averaging 6.54%, up from 6.49% in June.
- It also follows a rough stretch: the index had fallen for five straight months after peaking at 116.5 in January 2026, according to Mortgage Professional America’s analysis of NAR data.
- NAR Chief Economist Lawrence Yun said “home sales have been remarkably stable, even amid the rising mortgage rate environment of the past few months.”
- Regional gains varied widely year-over-year: the South improved 6.1%, the West 7.3%, the Midwest 4.0%, and the Northeast just 1.5%.
What’s Included
- The index is calculated using Freddie Mac’s 30-year fixed mortgage rate, associated points and fees, and a median loan value based on NAR’s median home price assuming a 20% down payment.
- A reading of 100 means a household earning the median income has exactly enough qualifying income for a mortgage on the median-priced home; anything above that signals improving, not perfect, affordability.
- NAR breaks the index out regionally and by metro area alongside the national figure, which is why some buyers are feeling this rebound more than others.
What Consumers Should Do
- Don’t read one good month as a trend reversal. Affordability is still historically tight, and a single uptick doesn’t undo years of price growth.
- Check your specific region. With the South and West improving far faster than the Northeast, a national number may not reflect your local market at all.
- Get pre-qualified now if you’re close to buying. Yun noted that in some smaller Midwestern metros, a household income of just $60,000 is enough to afford the median-priced home — worth confirming with a local REALTOR® before assuming you’re priced out.
- Watch the next mortgage rate move. Rates ticked up from 6.49% to 6.54% between June and July, so further affordability gains depend on rates cooperating, not just prices holding steady.
