U.S. Housing Market Affordability Improves
The U.S. housing market is showing early signs of stabilization after years of high prices and limited sales, improving overall affordability. According to Compass chief economist Mike Simonsen, rising incomes and capped or slightly declining home prices are allowing buyers to re-enter the market. After a prolonged period where elevated mortgage rates and high costs sidelined many buyers, sales are beginning to increase, signaling a shift in market dynamics.
At the same time, the market is experiencing a surge in withdrawn listings, indicating “shadow demand” from homeowners who have delayed moving for years. Simonsen estimates around 150,000 owners could return to the market if conditions improve. While mortgage rates are expected to stay in the low-6% range rather than dropping sharply, this balance may support higher sales without driving prices up too quickly. Notably, the average price of new single-family homes recently fell below that of existing homes for the first time in 54 years, highlighting structural changes in the housing market.
