Home Prices 55% Above What Average Incomes Can Afford As Mortgage Rates Surge

U.S. home prices have risen 55% above what average incomes can afford, an industry executive calculates.

Mortgage rates jumped from 3% to over 7% this year while home prices stayed high due to low supply.

Incomes would need to rise 55%, home prices fall 35%, or mortgage rates drop to 4% to reach affordability.

Demand has dropped to pandemic lows with affordability the worst in 40 years.

A slight increase in new listings bears watching to see if inventory rises to cool prices.