Housing Prices at Record Highs Undercut the Affordability Narrative

The Spring sales season ends with a thud. Affordability is in the gutter.

have gone nowhere since October 2022.

The National Association of Realtors reports Existing-Home Sales Rise 3.2 Percent in May.

“The back-and-forth in monthly home sales activity, driven by mild fluctuations in mortgage rates, shows how sensitive home buyers are to affordability conditions,” said NAR Chief Economist Lawrence Yun. “However, job gains—more than half a million since the beginning of the year—will continue to provide support for the housing market.”

“The median home price has reached an all-time high. Even so, affordability is better than a year ago because wage growth is outpacing home price growth,” Yun continued. “However, progress on long-term housing affordability could be hampered if inventory growth continues to stall. Without consistent gains in inventory, home prices can accelerate. It is critical to introduce more supply to the market to widen the opportunity for homeownership.”

Existing-Home Sales Month-Over-Month

Changes have been essentially trendless for years.

Key March 2026 Statistics

Sales Month-Over-Month: 2.4% decrease in existing-home sales month-over-month.
Sales Year-Over-Year: 2.8% increase in existing-home sales year-over-year to a seasonally adjusted annual rate of 4.09 million.
Inventory Units: 1.56 million units: Total housing inventory down 0.6% from May and up 1.3% from June 2025.
Inventory Supply: 4.6-month supply of unsold inventory, up from 4.5 months last month and unchanged from 4.6 months one year ago.
Median existing-home price:$440,600: Median existing-home price for all housing type.
1.8% increase from one year ago ($432,700)—the 36th consecutive month of year-over-year price increases.
Median Market Time: 28 days median time on market for properties, down from 29 days last month, up from 27 days in June 2025.

Existing-Home Sales Year-Over-Year

Existing Home Sales Supply

The NAR does not seasonally adjust much of its data as evidenced by the above silly looking chart. chart.

Seasonally adjusted, supply is no longer rising. May and June supply are below the highs a year ago. That’s the first time since at least 2021.

Existing-Home Sales vs Mortgage Rates

In contrast to Yun’s statements, there has been no traction in existing home sale with declining mortgage rates.

Rates fell from 7.62 percent to 6.05 percent with sales meandering nowhere.

Sales have basically gone nowhere even as rates fell from 7.62 percent to 6.05 percent.

But rates have risen again. The current Mortgage News Daily rate is 6.68 percent.

MND is more accurate than the Freddie Mac data in my chart because it includes points and fees. I use Freddie Mac data because I have a download from the St. Louis Fed.

The only conclusion is home prices are still too high, mortgage rates are too high, or both.

Affordability Nonsense

Here is Lawrence Yun’s comment on affordability from last month.

“More Americans are on the move, with home sales rising to the highest level since December. This is great news for the housing market and the economy,” said NAR Chief Economist Dr. Lawrence Yun. “Improving affordability is helping drive this momentum. Even with mortgage rates ticking up compared to earlier in the year, they remain lower than a year ago and are essentially at the long-term historical average. Income gains are also outpacing home price growth by a small margin in most parts of the country.”

“The new record-high May home price reflects solid fundamentals for homeowners and ongoing supply constraints,” Yun said.

I commented, “So we have record high prices and rising interest rates and Yun yaps about improving affordability.”

Yun repeated the nonsense this month on the basis of wage growth.

Real wages are declining, median prices are rising, Case-Shiller home prices are at record highs, and mortgage rates are back up to 6.68 percent.

Yet, Yun claims affordability is improving.

Yun calculates an affordability of 102.3, up from 95.5 a year ago. That’s a 7.12 percent increase in affordability. What a preposterous hoot.