NOTEBOOK – ONE GOOD READ: U.S. housing affordability worst since 1989

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Last week, the National Association of Realtors reported that its housing affordability index fell to 98.5 in June, the lowest level since June 1989, writes Nicole Friedman for the Wall Street Journal. The index factors in family incomes, mortgage rates and sales price of existing single-family houses. Why was it more expensive to buy a house in June? Two things: record high home prices and rising rates for home mortgages. The drop in affordability makes it especially hard for first-time buyers to enter the market and access the main path for the U.S. middle class to build wealth, writes Friedman. Some in the real estate industry don’t see much relief in the future. “We’re not going to go back to 2019 prices,” Nicole Bachaud, an economist at Zillow Group Inc., told Friedman. “Even if prices start to fall a little bit, it’s not going to be in any meaningful way that impacts affordability.”