U.S. home prices fell 16%: Affordability snaps back to historic norm

U.S. home prices fell 16% – a turning point for affordability

The latest ICE Mortgage Technology Mortgage Monitor shows that a ↓ 16% correction in home values would push the national housing‑affordability index back to its long‑run mean. Current metrics: median household income is up ↑ 19% year‑over‑year, while mortgage rates have slipped from 6.59% to 4.99%, a 1.60‑point decline. According to the June 2026 report, the average‑priced home now consumes 29.8% of median income, down from a peak of 35.0% in October 2023.

“Affordability is improving on paper, but the path back to historic norms remains uncertain,”

notes ICE. Short‑run levers like rates can move quickly, yet broader economic shifts—such as a rise in unemployment—are required for a sustained drop in Treasury yields. For broader context, see Reuters and Bloomberg.

Words by Dominic Mercer (Global Real Estate Strategist).