WSJ: Housing Affordability Worst Since 1989

WSJ headline: U.S. Housing Affordability in June Was the Worst Since 1989

Sub-headline: Record-high home prices combined with rising mortgage rates price more buyers out of the market, prompting existing-home sales to fall

It was more expensive to buy a U.S. home in June than it has been for any month in more than three decades, as record-high home prices collided with a surge in mortgage rates.

The National Association of Realtors’ housing-affordability index, which factors in family incomes, mortgage rates and the sales price for existing single-family homes, fell to 98.5 in June, the association said Friday. That marked the lowest level since June 1989, when the index stood at 98.3.

Existing-home sales have declined for five straight months. Worsening affordability has been a big factor, pricing more buyers out of the market. But even with fewer transactions, prices continue to rise strongly from a year ago because the number of homes for sale around the U.S. remains below historical levels.