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U.S. House Prices Rising Twice as Fast as Pay, Says Poll

Guess what—young people not being able to afford houses looks like it has nothing to do with how much they love avocado toast. Property-market analysts polled by Reuters have revealed house prices in the U.S. are rising twice as fast as the rate of pay and the housing supply hasn’t been able to keep up with rising demand, making home-ownership less and less affordable. The latest poll of nearly 45 analysts showed the S&P/Case Shiller composite index of home prices in 20 cities is expected to gain 5.7 percent this year, compared to predictions for average earnings growth of just 2.8 percent. “We are not seeing a temporary phenomenon,” said Sal Guatieri, senior economist at BMO Financial Group. “House prices have been outrunning family incomes for several years in the U.S. and while demand has cooled off a bit, the supply side is still very tight.”