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As mortgage rates climbed and incomes had trouble rising in line with increasing home prices, US housing became less affordable in June than it was during the same time last year, according to the National Association of Realtors (NAR).

Nationally, the median sale price for an existing single-family home in the US this June was $237,700, marking a 6.6 per cent increase year-over-year.

Meanwhile, the national housing affordability index measured 153.1 in June, down from 155.2 some 12 months prior.

According to NAR, “a value of 100 means that a family with the median income [according to the U.S. Bureau of the Census] has exactly enough income to qualify for a mortgage on a median-priced home.”

Any index reading over 100 indicates a median-income family earns more than enough to qualify for a mortgage on an existing single-family median-priced home, supposing they make a 20 percent downpayment. Conversely, an index reading under 100 would mean the family would not be able to qualify.

Year-over-year, affordability declined by 3.6 per cent in the West, 1.5 percent in the South and a modest 0.7 percent in the Midwest.

The Northeast is the only region that was actually more affordable in June 2015 than it had been at the same time in 2014. Here, although existing single-family home prices increased by 4.4 percent, affordability increased by 1.1 per cent year-over-year resulting in an index rate of 150.7.

However, despite a modest year-over-year percentage increase, the Midwest’s 191.1 index reading makes it the most affordable region followed by the South at 161.4. The West is the least affordable region. Its index measured 113.9 as of June.

NAR says that with rates pushing upwards, potential homebuyers may try to snatch up property more quickly, noting the availability of low-downpayment lending options.

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