A Reuters (TRI, Financial) poll of housing market analysts carried between Nov. 12 and Nov. 27 shows that affordability for first-time homebuyers in the United States is expected to worsen further in the next year due to ongoing supply constraints and limited Federal Reserve interest rate reduction.
Average prices remain over 50% higher than pre-pandemic levels even if the rate of home price rises is projected to slow down. Particularly for families, entry-level housing inventory still lags behind demand, which chomps away at purchasing power.
Compared to a similar poll in August, most analysts polled—10 of 19—shifted their view on affordability from "improve" to "worsen." All the respondents back then expected improvements."Older generations are driving the market, acquiring second or third homes, which prices out younger buyers struggling to save for down payments," said John LaForge, head of real asset strategy at Wells Fargo Investment Institute.
With affordability predicted to remain a major obstacle in the U.S. housing market, economists pointed out that somewhat reduced borrowing costs over the next six months are unlikely to greatly increase homebuying activity.
