CHICAGO, July 20 — On the desk of every mortgage officer and real-estate economist sits a single figure that separates the possible from the out-of-reach. The National Association of Realtors released its monthly Housing Affordability Index today, a snapshot of whether the typical American family can still qualify for a loan on the typical American home. The numbers land at a moment when the scene in many cities—open houses, bidding wars, For Sale signs—tells only half the story.
The index does the other half: it measures, at the national and regional level, whether a family earning the median income has enough earnings to qualify for a mortgage on a median-priced home, assuming a 20 percent down payment and a qualifying ratio of 25 percent. A value of 100 means the family has exactly enough.
Anything above that means they have more than enough.
How the Index Works
Consider a composite index of 120.0. That figure—the one the NAR reports each month—means a family earning the median income has 120 percent of the income required to qualify. It is not a measure of home prices alone, nor of incomes alone.
It marries the two, along with prevailing interest rates, into a single benchmark that has become a standard for lenders and policymakers tracking mortgage qualification conditions at a macro level across the United States. The qualifying ratio of 25 percent is the key.
Lenders typically require that a borrower’s monthly housing costs—principal, interest, taxes, insurance—do not exceed that share of gross monthly income. The index assumes that 20 percent down payment, a hurdle that has grown steeper for many first-time buyers, though the index itself does not measure the availability of that down payment. It measures only the income side of the qualification equation.
Measuring the Broader Cost of Living
Housing affordability is one piece of a larger puzzle: the cost of living in an area, tracked by the cost-of-living index. The Organisation for Economic Co-operation and Development has published its own data on housing prices around the world, including housing rent price indices, real and nominal house price indices, and ratios of price to rent and price to income. Those international benchmarks give context to the NAR’s domestic snapshot, showing how U.S. affordability compares with conditions in other developed economies.
By nightfall, economists and real-estate analysts will have plugged today’s index value into their models, parsing whether the macro trend is tightening or loosening. The index does not predict where prices or incomes are headed—it only reports where they stand.
But for families weighing a mortgage application, that single number, updated monthly, can feel like the difference between a home and a rental. In the months ahead, the next NAR release will show whether the qualifying threshold has moved. The OECD will continue to publish its international comparisons.
For now, the index offers the clearest ground-level measure of what it takes to buy the median home in America.
Sources
{“@context”: “https://schema.org”, “@type”: “NewsArticle”, “headline”: “National Association of Realtors Index Measures Mortgage Qualification”, “description”: “CHICAGO, July 20 — On the desk of every mortgage officer and real-estate economist sits a single figure that separates the possible from the out-of-reach….”, “datePublished”: “2026-07-20T09:30:00+00:00”, “author”: {“@type”: “Person”, “name”: “Isabella Moore”}, “publisher”: {“@type”: “Organization”, “name”: “InfoPulse Today”, “url”: “https://newsfeed.infopulsetoday.com/”}, “citation”: [{“@type”: “CreativeWork”, “url”: “https://en.wikipedia.org/wiki/National_Association_of_Realtors”}]}
