Demand / Supply

The dream of homeownership has grown more out of reach for middle-class Americans during the pandemic.

The surge in home prices and sharp decline in the number of homes for sale have made home buying more difficult for many Americans compared with two years ago, according to a study from the National Association of Realtors released Monday. The Covid-19 pandemicturbocharged the housing market(Links to an external site.), as buyers sought to take advantage of low mortgage rates and move into bigger houses. But the supply of homes for sale, which was already unusually low before the pandemic, plummeted. Home-building activity slowed and many potential sellers delayed their moves orwere reluctant to sell(Links to an external site.). Americans in the middle-class income levels experienced significant declines in buying power.

Homeownership has been a traditional route for many American families to build wealth. As more home buyers are priced out, their inability to buy could have long-term consequences for their future nest eggs, economists say. Fast-rising rent prices could also make it more difficult for thwarted buyers to save money to enter the market in the future.

"It's hard when both options are eroding in affordability so quickly," said Skylar Olsen, principal economist at mortgage-finance startup Tomo Networks, referring to home prices and rent prices. "That will just make your future wealth building even harder."