26% payment spike pushes US housing affordability to record low

American house hunters continue to bend under the weight of soaring mortgage rates and sticky house prices.

The National Association of Realtors affordability index decreased to 91.7 in August, marking the lowest level in data back to 1989, according to data out Friday. A level below 100 means a household with a median income doesn’t earn enough to qualify for a mortgage on a median-priced home.

Ponder the plight of the typical American house hunter over the past year through August …

Median price: Rose 3.7% to $413,500.

Mortgage rates: 7.15% from 5.29%.

Estimated payment: Up 26% to $2,234 a month, assuming 20% downpayment.

Payment share of incomes: 27.3%, up  from 22.6%.

Qualifying income: Up 26% to $107,232.

“The highest mortgage rate in two decades is detrimentally limiting the homeownership opportunity for many middle-class households,” Lawrence Yun, NAR’s chief economist, said in an emailed statement. “Unintentionally, no doubt, the Federal Reserve is widening social inequality with only the high-income families — earning above $100,000 — able to comfortably buy a home.”

A series of interest-rate hikes by the Fed — and more recently a surge in bond yields — has skyrocketed mortgage rates to the highest level in more than two decades, hurting both housing supply and demand.

Not only is that pushing prospective buyers to the sidelines, but it’s also discouraging homeowners from giving up their low rates to move. That’s putting a lid on inventory and keeping prices elevated.

The latest survey of consumers by the University of Michigan showed that 62% said now was a bad time to buy a home because of higher borrowing costs. That’s close to the highest share since 1982, according to data out Friday.

Affordability has likely worsened since the August data as mortgage rates have climbed even higher in recent weeks.