Why Is Buying a Home So Tough These Days?

Last year, Americans bought the fewest homes in nearly 30 years. It's not because people don't want to buy homes; it's because many can't afford to. High housing prices, not enough homes for sale, and rising mortgage rates are making it very hard, especially for first-time buyers. Experts say these issues might not improve soon. The U. S. hasn't been building enough new homes for more than a decade. This shortage won't likely fix itself until the 2030s. Even with all these challenges, home prices are still rising. In December, the average home price hit a record high of over $407, 000. "It's crazy to think that in a country with more people than ever, home sales are so low, " said Lawrence Yun, an economist. He blames high prices, high mortgage rates, and not enough homes. Last year, existing home sales fell by 0. 7% to 4. 06 million, the lowest since 1995. Despite this, home prices rose 4. 7% because there are just too few homes available. Many factors contribute to the housing shortage. For example, people are keeping their homes for longer. Also, while President Trump made promises to increase housing supply, it hasn't happened quickly. Economists don't expect mortgage rates to go back to pre-pandemic levels anytime soon. They think rates will stay above 6% this year. In December, home sales rose by 9. 3% compared to the same time last year. But this doesn't mean things are getting better. First-time buyers still struggle a lot, as they don't have home equity to help with down payments.