In August, the monthly mortgage payment increased by 2.9% compared with July, while the median price of single-family homes declined slightly by 0.8%. In comparison with the same period in 2022, affordability fell significantly, reaching a historical low as the typical monthly mortgage payment surged by 26.2%, while median family income increased by just 4.7%, according to the National Association of Realtors' Housing Affordability Index.
Persistent rate hikes have played a significant role in housing's declining affordability, with the effective 30-year fixed mortgage rate reaching 7.15% in August, up from 5.29% the previous year.
Housing affordability had double-digit declines from a year ago. The Midwest region has the most significant decline of 19.6%, followed by the Northeast with a dip of 19.1%. The South experienced a weakening in price growth of 16.4%, followed by the West, which fell 14.2%.
Affordability was down in all four regions from last month. The Northeast region had the most significant dip of 2.8%, followed by the South with a decline of 2.4%. The West region had a decrease of 1.5%, followed by the Midwest region had the smallest decline of 1.2%.