WASHINGTON – “Housing price ‘deceleration’ provides little comfort to first-time homebuyers and renters struggling to find affordable housing,” said David M. Dworkin, president and CEO of the National Housing Conference. “Shaving a few points off a growth rate for housing costs that is still in the double digits is not going to address our housing affordability crisis.”
“Despite mortgage interest rates nearly doubling, housing prices – and their impact on inflation – continue to be unaffordable to most Americans,” Dworkin said. “Rising interest rates have slowed housing growth, but they have also increased the cost of building new housing, limiting much-needed supply.”
Dworkin’s comments were in response to this week’s report by the Federal Housing Finance Agency (FHFA), which said housing prices “decelerated” to an annualized growth rate of 17.7 percent. The three-month average increase in the Case-Shiller Home Price Index was at 0.33% per month, indicating prices have cooled, especially in supercharged markets like Seattle, San Francisco, and San Diego, but prices continued to rise in 13 of the 20 Case Shiller markets.
According to NHC’s Paycheck to Paycheck database, a Registered Nurse cannot afford to buy a home or rent a two-bedroom apartment in Nashville, Tennessee; Denver, Colorado; or Phoenix, Arizona.
“As long as our supply cannot meet growing demand, housing will remain unaffordable, and inflation will resist efforts to yield to rising interest rates. Increasing interest rates is a bitter but necessary pill to treat inflation, but it will have a limited impact on shelter supply shortages driving the consumer price index. Higher mortgage and construction loan rates will worsen housing affordability and constrain supply growth,” Dworkin said. “The law of supply and demand cannot be repealed.”