Home affordability deteriorated for the fifth consecutive month as rising mortgage rates and stubbornly high home prices squeezed prospective buyers, new data shows.

The housing affordability index tracks the ability of median-income households to purchase a median-priced home in their area. When the index declines, it signals that homes are becoming less affordable relative to income. This month's drop continues a troubling trend that started months ago.

Mortgage rates have climbed since the start of 2024, making monthly payments larger even for the same property. Meanwhile, home prices remain elevated across most major markets. Together, these forces create a double burden for buyers who already struggle to accumulate down payments and qualify for loans.

For a typical household earning median income, this environment means fewer affordable options. A home that required 25% of monthly income two years ago might now demand 35% or more. Many buyers face a simple reality: they earn too much to qualify for first-time homebuyer assistance programs, yet too little to comfortably afford current market prices.

The impact varies by region. Coastal markets and high-growth areas suffer the worst affordability gaps. But even secondary markets have seen meaningful deterioration. Some families who delayed homebuying hoping for better timing now face the prospect that waiting has only worsened their position.

Renters considering the buy versus rent calculation increasingly find that renting makes financial sense. Monthly rent payments sometimes undercut mortgage costs, even accounting for long-term equity building. This dynamic keeps many potential buyers on the sidelines, reducing housing demand and potentially moderating price growth in coming months.

The five-month decline suggests this affordability crisis shows no signs of reversing soon. Builders continue adding inventory slowly while demand softens. Policymakers debate whether interest rate cuts or housing supply increases offer faster relief. Ordinary buyers, meanwhile, face a simple truth: home