With the U.S. housing market on the upswing and construction still lagging far behind demand, more and more households are being priced out of homeownership. A new study by the National Association of Home Builders (NAHB) finds that a $1,000 boost in the median price of new homes, which could be sparked by additional government regulations, would make homeownership unaffordable to some 152,903 households.
Similarly, NAHB found that a mortgage rate increase from 4 percent to 4.25 percent would effectively keep another 965,000 households from buying a home.
New buyers—including millennials—are especially vulnerable to being priced out of ownership in the near future, as the costs of buying a home continue to rise. And with housing stock failing to meet demand, current homeowners are less likely to sell their properties because they aren’t confident that they’ll be able to find a new home they can afford.
Furthermore, a forecast from the National Association of Realtors projects that home prices will continue to rise in 2017, but with a small lag as more new homes are completed. Estimates put the home price increases at 4.9 percent for 2016 and 3.9 percent for 2017. In the meantime, check out 10 rising U.S. cities where homeownership remains relatively affordable.