Home prices have risen 18% over the past 12 months, roughly six times faster than wages across the U.S., according to Fortune, but waning affordability can’t keep a record share of buyers in the mix for much longer. Though housing inventory was expected to rebound at the start of 2022, it actually plummeted to a new low, pushing home prices to new highs amid persistent demand from steadfast buyers.
Now, as mortgage rates rise beyond the 4% threshold, sky-high prices will rein in a frenzied market, but not until after a busy spring housing market, and possibly not even until 2023, market experts say.
But housing economists are clear: This frenzy will eventually end. Simple economics dictates that home price growth can't outpace income growth forever. At its latest reading, home prices were growing six times faster than wages.
The housing market will eventually cool. That's the good news. The bad news? All signs point to the housing boom continuing through at least the spring housing market we've just entered.
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