There’s a growing rift between housing availability and affordability, according to a report by the National Association of Realtors.
A new housing affordability model created by the NAR and realtor.com indicates that homebuyers “at many income levels” could see too few listings within their price range in the coming months, according to the NAR.
And Lawrence Yun, NAR chief economist, said that one of the top complaints realtors have been hearing from clients is the growing distance between what’s listed for sale and what they can afford.
“Home prices have ascended far past wage growth in much of the country in recent years because not enough homeowners are selling and homebuilders have not boosted production enough to meet rising demand,” Yun said. “NAR and realtor.com's new affordability measure confirms that buyers aren't exaggerating about the imbalance. Amidst higher home prices and now mortgage rates, households with lower incomes have been able to afford less of all homes on the market last year and so far in 2017.”
“Consistently strong job gains and a growing share of millennials entering their prime buying years is laying the foundation for robust buyer demand in 2017,” said Jonathan Smoke, chief economist at realtor.com. “However, buyers with a lower maximum affordable price are seeing heavy competition for the fewer listings they can afford. At a time of higher borrowing costs, this situation could affect affordability even more as buyers battle for a smaller pool of homes and bid prices upward.”