The housing outlook for the second half of the year is all about affordability—for buying and renting. How bad will it get, and how much will it hurt the recovery in home sales?
Home prices are still rising, but at a slower pace than this time last year. That cannot be said of mortgage rates, which are now on a straight trajectory up. The short supply of homes for sale shows little sign of improving, though, which is keeping prices high. At some point, however, higher mortgage rates will hit affordability and could trump that short supply in taking the heat out of home prices.