It is now harder to afford to buy and own a home than at any time in U.S. history, according to the housing affordability index published last week by the National Association of Realtors (NAR).

The NAR notched its index at 98.5 in June, higher than any time since June 1989, when the index stood at its last record height of 98.3.

The higher the number, the harder it is to pay for a house.

The index factors together average home sale prices, mortgage interest rates, and average family incomes.

Existing home sales have declined for five months straight, the NAR said, because prices remain high and inflation and interest rates are both on the rise.

However, the number of home sales is up, year over year, because there still are more ready buyers than there are homes for sale.

The price of existing homes has rocketed up 46 percent in the last three years, the NAR noted.

Still, homes remained relatively affordable because the U.S. Federal Reserve held interest rates near zero and bought hundreds of billions of dollars’ worth of mortgage-backed bonds.

The Fed has stopped buying mortgage bonds and began raising interest rates in March. Mortgage rates now hover above 5 percent, compared to 3.1 percent last December, with the average rate on 15 August reaching 5.22 percent, Nerdwallet reported.

Higher rates and inflation are likely to rein back home prices’ rate of increases as the year continues, analysts told The Wall Street Journal; some even predict slight price declines in a few markets.

However, since 2009 during the Great Recession, home construction has failed to keep pace with demand, which will prevent prices from falling precipitously, economists pointed out to The Wall Street Journal.

TREND FORECAST: The factors driving home prices higher will continue for several more months: materials and skilled labor will be in tight supply, land on which to build new houses is becoming more scarce, and homeowners will continue to sit tight until mortgage rates level off or fall so they can afford to buy a new home after selling their current one.

Despite what was called good inflation news from July, the U.S. Federal Reserve will continue to raise interest rates, elevating the cost of mortgages and making it harder for even more people to be able to qualify for a loan.

More broadly, the lack of affordable homes will lead a larger number of younger people to lose the hope of home ownership, making them more cynical and less invested in their future or the future of their country.

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