Home prices and rents skyrocketed during the pandemic-fueled housing boom, and mortgage rates subsequently soared. Because mortgage rates shot up from historic lows so suddenly, people stopped selling their homes, and because the country is underbuilt by millions of homes, the sales halt didn’t help. The housing market has cooled down since: Home prices aren’t increasing exponentially, mortgage rates are lower than the more than two-decade high reached last year, rents are generally flatlining, and inventory has picked up. Still, everything feels very different than before the pandemic.
“We’re just coming through the worst housing affordability crisis we’ve ever seen in this country,” Shaun Donovan, former U.S. Secretary of Housing and Urban Development in the Obama era and chief executive of housing nonprofit Enterprise Community Partners, said in an interview with CNBC on Tuesday. “We had 18% year-over-year increase in rents, home prices rising at levels we’ve never seen. So we are seeing some leveling off, but it’s at a level that is well beyond what folks could afford.”
