Housing affordability in the U.S. is in crisis due to high mortgage rates and home prices. Home prices are over 50% higher than in 2020, while mortgage rates peaked at 8% in late 2023 and currently range between 6.5% to 7%. buyers are locked out of the market, and even a drop in mortgage rates would not solve the issue in major metro areas due to high prices. Tight inventory exists as current homeowners hold onto low-rate mortgages, limiting available homes for sale.
Even if mortgage rates dropped to 0%, an average home would remain unaffordable in some major metro areas due to high home prices being the bigger hurdle.
Current homeowners hold onto low-rate mortgages, causing affordable inventory to remain tight as they are reluctant to sell.
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