Americans missed out on a ‘once-in-a-lifetime’ chance to buy a house—the 3 shifts it would take to make housing affordable are ‘very unlikely’

Core Insights - The American dream of homeownership is increasingly out of reach due to rising mortgage rates and home prices, with the average age of first-time home buyers reaching an all-time high of 40 years [1] - The share of first-time buyers has decreased by 50% since 2007, highlighting the lack of affordable housing inventory [2] - Experts believe that significant improvements in housing affordability are unlikely in the near future, despite temporary drops in mortgage rates [2] Mortgage Rate and Income Analysis - Current mortgage rates are approximately 6.15%, which would need to fall to 2.65% for affordability to improve [4] - The median household income required for affordability is $132,171, while the current median is only $84,763 [4] - Home prices would need to decrease by 35% to $273,000 from the current $418,000 to achieve affordability [4] Market Realities - The options for making housing affordable, such as drastic reductions in mortgage rates or home prices, do not align with current market conditions [5] - Historical wage increases of over 50% have not been seen since post-World War II, indicating that significant wage growth is unlikely to occur in the near term [6]