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Danielle DiMartino Booth

Housing’s Headwinds Are Getting Stiffer

Plans to buy a home in the next six months have tumbled to the lowest level since June 2016.

Housing is becoming even less affordable.

Housing is becoming even less affordable.

Photographer: Ty Wright/Bloomberg

Expectations were approaching ebullience heading into this spring’s U.S. home-selling season. The National Association of Realtors entered the year expecting home sales to grow by 3.7 percent in 2018 after last year’s lackluster 1.1 percent increase. But now, the NAR’s chief economist has tempered his call with existing homes changing hands at the slowest pace since September and new home sales having fallen to the lowest level since October 2017.

With home prices at or near record highs, it takes more than a small boost to income to call potential buyers to action. The average household has to save for almost six and a half years to cover a 20 percent down payment on a home at current prices, according to a recent study by Zillow’s HotPads. That’s based on the steep assumption that workers can sock away 20 percent of their monthly take-home pay. Saving money is especially tough for renters. Zillow calculated last year that just 42 percent of rentals were affordable, defined as requiring 30 percent or less of one’s median monthly income to cover rent payments.