Melissa Brennan, another advisor in Plano with ARS Private Wealth, said the St. Louis Fed report misses some factors, particularly the effects of people moving around.

“Migration patterns in the U.S. have pushed home prices up significantly in growing metropolitan areas where existing housing inventory cannot satisfy demand,” she said. “Increasing home prices and higher mortgage rates in combination shrinks the buyer pool. Housing prices will have to come down more in some areas to compensate for higher mortgage rates.”

She said the Fed also missed the effect of low-paying entry level jobs on young workers’ enthusiasm to buy.

“Having been raised in an era of hyper-vigilance over physical safety and having done what was expected by going to college, they are graduating and being offered depressingly low compensation. Graduates are moving back home to save money for six months to even be able to afford a deposit and the first months’ rent on an apartment. They are discouraged and view doubt their ability to meet traditional goals of home-buying and having a family in the future.”


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