Housing affordability is already at the lowest level in decades – and the problem may soon get worse.
In a new analysis, Zillow economists estimated that home prices will rise by 6.5% between July 2023 and July 2024 because of limited inventory and stronger-than-expected demand. By comparison, home prices as tracked by the S&P CoreLogic Case-Shiller index typically climb by about 5.21% each year.
"Limited for-sale inventory continues to push home prices upward even as mortgage rates remain elevated," the economists wrote. "This shortage has buoyed competition for the homes that are for sale. Homes that went under contract (or 'pending') in July did so in 12 days – a week and a half faster than what was typical in 2018 and 2019."