Home prices in the United States are expected to become increasingly more unaffordable over the course of 2023 and 2024, the American Enterprise Institute (AEI) Housing Center has claimed.
In its recent Housing Market Indicators report, the think tank estimated that home prices would rise 2.9% year-over-year in June; up from the 2.1% increase recorded the previous month. In July, AEI expects a 4% rise from the previous year. Home prices are expected to jump by 6% over the course of 2023 and a further 7% in 2024.
“This is largely due to historically low supply, cooling yet still strong job numbers, low levels of foreclosures in most areas of the country, work from home, and continuing home price arbitrage opportunities,” the AEI explained.
According to the Mortgage Bankers Association, the current housing market is the most unaffordable in history. Since the pandemic, house prices have surged by 44%, with over 75% of homes on the market proving too expensive for the middle class, according to a report from the National Association of Realtors and Realtors.com.