Americans Struggling with Rising Cost of Housing in 2024

According to entrepreneur Pomp on X, the average American finds it quite challenging to buy a home today. The entrepreneur labeled the current housing price hike as a national crisis, attaching several charts to support his claims.

American Housing Sector Facing Crisis with Soaring Prices

In the recent X post, Pomp added a chart showing a 45% increase in home prices during the pandemic season. Also, mortgage rates increased from 3% to 7%, leading to a decline in national housing affordability.

It is nearly impossible for the average American to buy a home today.

Housing affordability is a national crisis.

Here are 48 charts from @NewsLambert that explain the US housing market.

There are some INSANE charts here.

See Charts: https://t.co/yEq3fuasYT pic.twitter.com/cDhmrRz7pw

- Pomp (@APompliano) March 6, 2024

These figures tally with a report from Realtor.com in February 2024. This report revealed that there were about 339,370 new home sales in February.

However, sales are still 17% lower than in February 2019, when 409,934 new home listings were recorded.

According to the report, the reason for this decline is rising mortgage rates, making it quite difficult for prospective homeowners.Also, in February 2024, economists at Zillow predicted that over the next 12 months, U.S. home prices will increase by 5.5% rather than the previous forecast of -0.1%.

Additionally, Zillow forecasted a 4.2% increase in home prices between January 2024 and January 2025.According to a senior economist at Zillow, Orphe Divounguy,

Housing affordability remains the biggest challenge for many existing homeowners and potential homebuyers."

Divounguy further stated that Mortgage rates reached their highest peak in 23 years a few months ago, in October, before declining at the end of 2023. However, as mortgage rates fell at the year's end, many buyers and few sellers re-entered the market.

As such, the flow of existing homes onto the for-sale market has continued to improve year-over-year.

The economist further revealed that Zillow data shows new listings are now up 6% while the number of homes for sale has increased by 3% compared to a year ago.

The housing market was supply constrained in 2023, and the increase in supply bodes well for potential home buyers and housing sales this spring".

Will Housing Ever Become Affordable to Americans Again?

According to a CNBC report in October 2023, the median range of a house in the U.S. in 2020 was $49,680. However, it moved above $107,000 in 2023. Notably, the National Association of Realtors (NAR) chief economist, Lawrence Yun, labeled the increase as a worrisome development for America.

He believes that affordability depends on three main factors: family income, the price of the house, and the mortgage rate. However, since 2019, interest rates have become a significant challenge.

According to the NAR executive, some factors, such as higher wages, could help ease the affordability burden on Americans.

Also, downward pressure to reduce home prices would be a great help. However, Yun believes such a price reduction will only be sustainable if America builds more homes. This implies that a shortage in housing units is aiding the price increase.

Overall, these reports tally with entrepreneur Pomp's assertions on the rising cost of housing in America.

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