US Economy Headed for 'Soft Landing' But Housing Affordability Squeeze to Continue
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The US economy is on track for a "soft landing" where inflation falls without major job losses, but housing affordability issues will persist.
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Housing became very unaffordable in 2021 when home prices soared double-digits despite near 0% interest rates.
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The average 30-year mortgage rate hit a 20-year high of 7.79% in October 2022 but has fallen to 6.63%, improving buyer sentiment.
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However, economists say rates likely won't fall below 6% this year and home prices remain near record highs, keeping housing unaffordable.
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Building more housing is a sustainable solution but varies by location; lower rates alone drive up prices without increasing supply.