US Housing Market “Finally Listen” to home buyers, who are suffering from high mortgage rates and housing prices, says the economist

• Housing affordability in the US 2025 It has improved slightly due to mortgage trends and home prices or with the decline in some markets, although the conditions are still much more severe than before pandemia. The first American analysis shows 3.1% a year of affordability. But most American homes still seem difficult.

After many years of affordability to the US, the home market is “finally starting to listen,” says Fortune 500 financial services company First American.

High mortgage rates and housing prices for many years have come to home buyers, especially after pandemic housing markets, which have been below 3% of the mortgage rates and have an affordable housing price. But since then, the mortgage rates have increased in 2023. Reached 8%at the end.

Now that the mortgage rates are slightly lower in the last few months – currently around 6.5% – some buyers have at least some breath room. Meanwhile, home prices are usually equal to or slightly decreasing due to decline in demand and increasing supply, according to the National Association of Home Builders.

“For prospective buyers who waited aside, the housing market is finally starting to listen,” wrote Mark Fleming, Chief Economist, on August 29. In the first American post.

Fleming’s analysis is based on the Price Index of the real house (RHPI), which is distinguished because it reflects inflation, unlike other home price indices. This is because “like other goods and services today, the price of a house today is not directly similar to the price of the same house 30 years ago,” says First American.

While the look at most other home prices indexes shows that the prices of the home will increase significantly, First American actually shows that national housing affordability increased by 3.1%in June compared to the fifth consecutive month with annual profits.

However, if you look at something like the Case-Shiller home price index, it would show that home prices are almost 50% higher than it was five years ago.

RHPI is also different from other pricing indices, as it measures consumer purchasing power over time (depending on the impact of income and interest rate changes over time), while other indexes such as Case-Shiller’s home value change over time.

There are some promising signs to improve housing affordability: mortgage rates are slightly decreasing, home growth slows down and household income is slightly increasing, says First American. This is the affordability of LED housing to the best point of 2024. September, according to First American analysis.