Critical shortage of affordable houses in the US will be observed in the short-term, Reuters informs with the reference to major property market analytics. It will lead to price growth that will be faster than inflation and wage rise.

Housing prices in the US recovered their losses, after they lost about third of their value decade ago that resulted in financial crisis and deep downturn. Recovery became possible due to strong labor market that stimulated economic activity and housing demand.

However, supply did not meet growing demand and that made houses less affordable.

Average earnings growth is still less than 3%, while housing prices rose by more than 5% in average during last few years.

Last survey of analytics showed that S&P/Case Shiller composite index for prices in 20 cities will increase this year by 5,7%. Forecasted wage growth is 2,8% and inflation growth is 2,5%.

The situation will not reverse until demand slows down and supply grows. Until then, Americans will prefer renting houses instead of buying. However, renting price grows faster than wages in recent times as well.

Another problem for home buyers is rising mortgage rate. According to analytics’ forecast 30-year rate will increase to 4,60% by the end of this year and will reach 5% by the mid-2019.