Housing affordability may not return to pre-pandemic levels until 2047

For years, home buyers have been told the housing market would eventually “normalize” — meaning if mortgage rates came down or inventory improved, affordability would return to something resembling pre-pandemic levels such as 2019.

But new data from Realtor.com suggests that version of the market may never come back, and returning to pre-pandemic affordability would require outcomes economists say are extremely unlikely.

The numbers underscore a tougher reality for buyers, one expert points out: America’s housing affordability problem isn’t merely cyclical but largely structural.

“It’s not a realistic benchmark. I think that the problem in the housing market is a structural problem that’s been going on for decades,” PMG Affordable principal Dan Coakley told Fox News Digital.

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“While it might appear that things were more affordable in 2019, this kind of march toward lack of affordability has been going on for a long time,” he continued. “And it’s gonna take a long time to make a dent in it.”

A worker affixes panels to the roof of a new KB Home unit in Phoenix, Arizona. (Getty Images)

“I don’t think that affordability is going to go all the way back to a point where people feel like it’s manageable.”

In order for the U.S. housing market to feel affordable again, a recent Realtor.com report found that would require mortgage rates falling to about 2.65%, median household incomes rising by roughly 56% or home prices dropping about 35%. Realtor.com defines “affordable” as a mortgage payment equal to about 21% of median household income, compared with more than 30% currently.

“Just how radical those moves would be with respect to interest rates or home price depreciation or income increases, it just shows you how much work we have to do,” Coakley reacted. “I have to compliment the Trump administration now for really putting this into bright focus, because I think it’s going to be really necessary, and moving all of those levers as much as we can is going to be super, super important.”

Coakley added that he doesn’t see rates going below about 3% or even close to that level, while noting that median incomes have not kept up with surging rents and home prices.

“People at the lower income levels or middle income levels, even upper-middle income levels, have not been able to access and participate in that asset level appreciation that’s been so fundamental to the American dream and what’s driven people’s net worth,” he explained.

“Increasing supply is probably one of the most important things we can do and that the…