Housing affordability is already at its lowest level in decades, and the problem could soon get worse.
In a new analysis, Zillow economists estimated that home prices will rise 6.5% between July 2023 and July 2024 due to limited inventory and stronger-than-expected demand. By comparison, home prices, as tracked by the S&P CoreLogic Case-Shiller Index, typically rise 5.21% each year.
“Limited inventory for sale continues to push home prices higher even as mortgage rates remain high,” the economists wrote. “This shortage has fueled competition for homes for sale. Homes that went under contract (or ‘pending’) in July did so in 12 days, a week and a half faster than was typical in 2018 and 2019”.