Falling prices may be reeling buyers back into the housing market, but don’t let that fool you — homes are still far from affordable.
Prices in many US housing markets have been falling over the past year, interest rates are going down, and buyers are starting to make purchases again. But is it really the right time to buy? A careful look at the cost of mortgages over the past couple years suggests that prices aren’t nearly as low as they could be, and that over the life of a mortgage, buyers are actually paying far more for their homes than they would have in 2021 when housing prices peaked. Two solutions are needed to address this affordability crisis: buyers need to fully leverage their negotiating power, and cities need to encourage new housing.
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