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Lower interest rates, higher incomes made homes more affordable in June • North Dakota Monitor [1]

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Date: 2025-08

Housing became more affordable this June, as higher incomes and slightly lower interest rates overcame higher prices, according to a National Association of Realtors report.

However, the South and the Midwest are the only regions where a family with typical or median income can afford a median-priced house, according to the report. The group considers a mortgage to be affordable if the monthly payment (principal and interest) is 25% or less of the family’s income.

The affordability gap is highest in the West, where the typical family income is $113,783, just over two-thirds of the $164,832 that would be needed to purchase a median-priced home.

The Northeast, where the typical family makes $114,559, is also unaffordable by this measure, as a median-priced home requires an income of $141,264.

In the Midwest, the median family income is $102,419, more than the $86,256 needed to buy a median-priced home. The same is true in the South, where the median income is $97,812, slightly more than the $96,720 required to buy a typical home.

Nationally, affordability increased slightly compared with June of 2024, with the typical family making $105,431, about 94% of the $111,648 it would need to buy the median-priced home. That’s up from about 92% in June 2024.

In a video posted Aug. 15, Lawrence Yun, chief economist for the National Association of Realtors, said he expects lower interest rates to increase affordability in the months ahead.

“We know that mortgage rates will be coming down and that will bring additional buyers into the market. We just need to make sure we have more supply, more supply to meet that demand,” Yun said.

Stateline reporter Tim Henderson can be reached at [email protected].

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