The housing market inched toward greater friendliness for buyers in February 2025, according to the latest findings from the National Association of REALTORS®’ Housing Affordability Index, which has been inching back up since a fall in November 2024.
The index runs with a two-month lag—compared to last month’s affordability index (which covered up to January 2025), important metrics for affordability generally came down, if only slightly.
The median price on an existing single-family home in February was $402,500—up from January ($398,100). However, the February median was also well below most of the median prices reported during 2024, which remained over $400,000 from April to December 2024.
While prices inched up slightly during February 2025, so did median family income. In February 2025, the median family income was $104,287. This was up slightly from January’s median price of $103,850, continuing a steady rise that has been ongoing for the last 12 months.
Correspondingly, qualifying income (what is needed to afford monthly housing expenses with a 20% down payment) was down slightly—$102,096 in January to $102,000—continuing a decline going three straight months that started in December 2024. This also means qualifying income stayed slightly under median family income.
During February, mortgage rates (measured by the effective rate on loans closed on existing homes) came in at 6.92%. This is lower than January (7.04%) but higher than December (6.80%), and a fair bit higher than the lowest reported rate throughout all of 2024 (6.26% in September 2024).
The monthly principal and interest (P&I) payment in February was $2,125, continuing a downward trend since December 2024 (when the monthly payment fell month-over-month from $2,154 to $2,130). Year-over-year, the February 2025 monthly payment increased (the February 2024 payment was $2,036), but it also stayed below the $2,200-plus payments reported from April to July 2024.
Payment as a percent of income, which reached 24.5% in February 2025, has dropped in correlation with monthly P&I payments since December 2024.
With these numbers taken together, the overall fixed affordability index reached 102.2 in February 2025, comparable to the most recent previous high of 102.4 in October 2024.
Regional breakdown
Going by the region-wide affordability index numbers from February 2025, the four major U.S. census regions in order from most to least affordable are:
- The Midwest (134.2)
- The South (104.9)
- The Northeast (93.7)
- The West (71.2)
The Midwest saw the lowest median price on existing single-family homes, at $297,900. Median family income in the region was $101,308, the third-lowest of the four regions, but accounting for qualifying income ($75,504), the Midwest has the most buyer-friendly income ratio. The Midwest also had the lowest monthly P&I payment ($1,573), which was 18.6% of median income, the lowest percentage of the four regions.
The South had the second-lowest median price, $363,900, and the second most favorable ratio of median family income ($96,571) to qualifying income ($92,208). Monthly P&I payments in the South were $1,921, or 23.8% of income.
The Northeast and the West, meanwhile, posted income ratios where qualifying income exceeded the median family income:
- Northeast: median family income in February 2025 was $113,317, whereas qualifying income was higher at $120,912
- West: median family income of $112,549; qualifying income was $158,064.
The median price on an existing single-family home in the Northeast during February 2025 was $477,100. The average monthly P&I payment was $2,519, or 26.7% of income.
The West saw the highest median price at $623,700, and the highest monthly P&I payment at $3,293—this was 35.1% of income.
For the full NAR affordability index, click here.
