At the national level, housing affordability continued to fall in October compared to the previous month, according to NAR’s Housing Affordability Index. Compared to the prior month, the monthly mortgage payment increased by 7.3% while the median family income increased by 0.9%, making home buying less affordable in October. The monthly mortgage payment increased by $139 from last month.

Compared to one year ago, affordability fell in October as the monthly mortgage payment climbed 64.6% and median family income rose by 4.6%. The effective 30-year fixed mortgage rate1 was 6.98% this October compared to 3.12% one year ago, and the median existing-home sales price rose 6.2% from one year ago. Mortgage rates this October were the highest since August 2001, when the rate was 7.06%. For comparison, the median home price was $160,700, and the monthly payment was $860, with the payment at a percentage of income at 20.1%The median family income was $51,456, and the qualifying income was $41,280.

In October, potential home buyers need to make $8,605 more than the median family income ($89,507) to qualify for a home.

Line graph: Housing Affordability Index, October 2021 to October 2022
Bar graph: Mortgage Rates, October 2021 to October 2022

As of October 2022, the national index was below 100, which means that the typical family can no longer afford to buy the median-priced home. An index below 100 means that a family with a median income had less than the income required to afford a median-priced home. The income required to afford a mortgage, or the qualifying income, is the income needed so that mortgage payments on a 30-year fixed mortgage loan with a 20% down payment account for 25% of family income. 1The most affordable region was the Midwest, with an index value of 124.4 (median family income of $88,008 with a qualifying income of $70,752). The least affordable region remained the West, where the index was 63.4 (median family income of $97,523 and the qualifying income of $153,936).  The Northeast was the second most affordable region with an index of 95.5 (median family income of $101,531 and qualifying income of $106,368). The South was the second most unaffordable region with an index of 91.0 (median family income of $82,043 with a qualifying income of $90,192).

A mortgage is affordable if the mortgage payment (principal and interest) amounts to 25% or less of the family’s income.1

Bar graph: U.S. and Regional October Housing Affordability, 2022 and 2021
Bar graph: U.S. and Regional Median Family Income and Qualifying Income

Housing affordability2 had double-digit declines from a year ago in all four regions. The Northeast had the most significant decline of 37.4%. The South experienced a weakening in price growth of 37.2%, followed by the Midwest, which fell 36.3. The West had the most minor dip of 35.7%.

Affordability was down in all regions from last month. The South and West regions both fell 6.2%, followed by the Midwest with a decline of 5.1%. The Northeast region had the most minor decrease of 4.5%.

Nationally, mortgage rates were up 386 basis points from one year ago (one percentage point equals 100 basis points) from 3.12 to 6.98%.

Compared to one year ago, the monthly mortgage payment rose to $2,044 from $1,242, an increase of 64.6%. Compared to a year ago, the monthly mortgage payment increased by $802. The annual mortgage payment as a percentage of income increased to 27.4% this October from 17.4% a year ago. Regionally, the West has the highest mortgage payment to income share at 39.5% of income. The South had the second highest share at 27.5%, followed by the Northeast with their share at 26.2%. The Midwest had the lowest mortgage payment as a percentage of income at 20.1%. Mortgage payments are not burdensome if they are no more than 25% of income.3

Bar graph: U.S. and Regional Mortgage Payment as Percent of Income, 2022 and 2021
Line graph: Monthly Mortgage Payments, October 2021 to October 2022
Line graph: Median Family Income and Qualifying Income, October 2021 to October 2022
Line graph: Median Home Prices, October 2021 to October 2022

Last week, the Mortgage Bankers Association released data showing that Mortgage applications decreased by 1.9 percent from one week earlier. Mortgage rates are leaning toward 7%, and mortgage payments have continued to climb. Home prices have fallen. However, the other factors in qualifying for a home have become more challenging to overcome for potential home buyers.

Read the data release.

The Housing Affordability Index calculation assumes a 20 percent down payment and a 25 percent qualifying ratio (principal and interest payment to income). See further details on the methodology and assumptions behind the calculation.


1 Housing costs are burdensome if they take up more than 30% of income. The 25% share of mortgage payment to income takes into account that homeowners have additional expenses such as mortgage insurance, home insurance, taxes, and expenses for property maintenance.

2 A Home Affordability Index (HAI) value of 100 means that a family with the median income has exactly enough income to qualify for a mortgage on a median-priced home. An index of 120 signifies that a family earning the median income has 20 percent more than the level of income needed pay the mortgage on a median-priced home, assuming a 20 percent down payment so that the monthly payment and interest will not exceed 25 percent of this level of income (qualifying income).

3 Total housing costs that include mortgage payment, property taxes, maintenance, insurance, utilities are not considered burdensome of they account for no more than 30% of income.

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