Housing affordability to stay low amid high mortgage rates, scarce inventory

Housing affordability will struggle for the rest of the year, thanks to high mortgage rates and scarce inventory, according to Goldman Sachs.

The investment bank revised its forecast for home prices to 2.2% decline in 2023, from its previous forecast of a 6.1% drop in prices. "The tug of war between poor affordability and tight inventory will continue," strategists said in a note on Monday."While we are cognizant of the tailwind from tight housing supply, we expect affordability will likely stay poor, ultimately pushing prices lower in 2023."

, with the average rate on the 30-year fixed mortgage just surpassing 7% for the first time since March and hovering close to 20-year highs.. Existing homeowners are reluctant to sell properties they financed when rates were lower, keeping supply scarce and affordability constrained.

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