The US housing market is about to get even more unaffordable, as home prices will likely continue their uptrend over the next few years, according to the American Enterprise Institute Housing Center.
The Washington DC-based think-tank pointed to recent acceleration in housing costs, with home prices rising 2.9% year over year in June, up from the 2.1% annual increase in the prior month. , estimating home prices would rise 4% in July from a year ago. Home prices will surge 6% overall in 2023, and 7% overall in 2024, according to AEI's base-case scenario.
"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," AEI added in its report on Tuesday.