- October 1, 2022: Vol. 34, Number 9

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Structural underpinnings

by Sabrina Unger and Britteni Lupe

A confluence of forces has kept more younger buyers out of the homeownership game until now. What is the outlook for these factors going forward?

Unattainable home prices. The national median existing home price reached a new all-time high of $416,000 in June 2022, up 13.4 percent from a year prior, marking more than a decade of year-over-year monthly price gains, according to National Association of Realtors’ June 2022 Economists’ Outlook. For a household making $75,000, only 23 percent of homes on the market are affordable, down from 50 percent in inventory in 2018, according to an analysis by senior economist George Ratiu. Even though the pace of home price appreciation could slow or even reverse as interest rates rise, it’s unlikely prices will reset to attainable levels for many first-time buyers, given the long-standing supply-demand imbalance in markets where people want to live. Chronic undersupply. By some
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