The American Dream may be in shorter supply.
A growing number of Americans now find it increasingly difficult to achieve the dream of owning a home. Simply put, they can't afford the price or save enough money for the down payment.
A new housing affordability model created by the National Association of Realtors (NAR) and Realtor.com finds that homebuyers at many income levels could find "an inadequate amount of listings on the market within their price range" in the coming months.
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"Affordability is becoming much more challenging," said Lawrence Yun, NAR chief economist. "Home prices over the past five years have risen by 40 percent while income has only gone up half that rate, so on just the price and growth differential, there are affordability challenges."
Buyers with lower household incomes can expect heavy competition for the listings they can afford and rising mortgage rates will hamper their ability to afford these homes, Yun told NBC News. With interest rates rising "some people on the margins" may no longer be able to qualify for a mortgage, he said.
Nela Richardson, chief economist at Redfin, an online discount real estate broker, believes the lack of available credit is more of a problem than higher interest rates right now, especially for first-time buyers. Richardson told NBC News there are currently two separate housing markets: One market for high-income buyers that's doing very well and another for affordable homes that's struggling.
"We haven't seen any increases in affordable inventory in at least nine months," Richardson said. "Starter homes are just in short supply and that's bad for first-time home buyers and millennials. It's hard for people with middle class incomes to buy a home, so in most American cities the middle class is losing ground in terms of home ownership."