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We're currently amid a 14-month streak in which year-over-year nationally aggregated worker earnings growth (+3.4% YoY) has exceeded year-over-year nationally aggregated home price growth (+1.3% YoY). This period of housing market softness—with some pandemic boomtowns in the Sun Belt and Mountain West experiencing outright corrections—is helping improve underlying national housing affordability on paper, which became stretched following the overheating during the Pandemic Housing Boom and the subsequent mortgage rate shock.
To better understand how far nationally aggregated housing affordability remains from its long-run historical average, ICE Mortgage Technology calculated how much just one of the three core housing affordability levers would need to shift, on paper, to immediately return affordability to that long-run average:
U.S. incomes spiked +19%
U.S. home prices fell -16%
Mortgage rates fell 1.60 percentage points (from 6.59% to 4.99%)
To clarify: The calculations above show how much just one metric would need to shift—holding everything else constant—to return nationally aggregated housing affordability to its long-run historical average. This is a back-of-the-envelope exercise designed to illustrate how far affordability currently sits from that long-run average. The point isn't to identify the most likely path back to that historical norm, but rather to quantify the distance between where affordability is today and where it has historically been.
According to ICE Mortgage’s June 2026 Mortgage Monitor report, purchasing the average-priced U.S. home required 29.8% of the median U.S. household income needed to cover monthly principal and interest payments on a 20% down, 30-year fixed-rate mortgage.
The silver lining: That’s an improvement from the cycle high of 35.0% in October 2023.
In the short term, the affordability lever that can historically have the fastest immediate impact is mortgage rates. However, unless something material shifts in the broader economy (e.g., a spike in unemployment), most economic models remain skeptical of a material near-term decline in long-term Treasury yields and mortgage rates.
Over the past week, ResiClub PRO members got these 3 additional housing research articles:
Shift in Florida home prices since their 2022 peak, by ZIP Code via the ResiClub Terminal
Shift in Connecticut home prices since their 2022 peak, by ZIP Code via the ResiClub Terminal
There's only a couple of ZIPs in all of CT that aren't at least +15.0% above their 2022 peak via ResiClub Terminal.
Shift in L.A. area home prices since their 2022 peak, by ZIP Code via the ResiClub Terminal
Firms that would like a demo of the ResiClub Terminal should email: [email protected]