The housing market boom could last a little longer than expected, experts say

SOLEDAD: BEFORE THE PANDEMIC, A GALLUP POLL FOUND THAT 70% OF AMERICANS BELIEVED THE AMERICAN DREAM WAS ACHIEVABLE. NEARLY 1/3 OF THE COUNTRY FELT THE DREAM WAS OUT OF REACH. THEN, COVID-19 CHANGED ALMOST EVERYTHING. THE HOUSING MARKET IS TIGHTER THAN EVER. SUPPLY IS LOW. PRICES ARE HIGH. AND THAT MEANS AFFORDABLE HOUSING IS LESS AVAILABLE, AND FIRST-TIME BUYERS ARE FACING UNPRECEDENTED CHALLENGES. BAILEY JEREMIE: MY NAME IS BAILEY JEREMIE. I AM A MENTAL HEALTH THERAPIST, AND I LIVE IN HARLEM. I'VE BEEN THINKING ABOUT BUYING A HOME, IT FEELS LIKE FOREVER, HONESTLY. REBECCA SENN: MY NAME IS REBECCA SENN, AND I'VE BEEN THE EXECUTIVE DIRECTOR FOR THE NEW YORK MORTGAGE COALITION FOR FIVE YEARS. PEOPLE SEE OWNING A HOME AS AN AVENUE TO BUILD WEALTH AS THEIR LARGEST ASSET. AND IT'S STILL THE AMERICAN DREAM TODAY. O'NEIL EDWARDS: MY NAME IS O'NEIL EDWARDS FROM BROOKLYN, NEW YORK, AND I'M 27 YEARS OLD. WE'VE MOVED PROBABLY LIKE, MAYBE 10 TIMES IN THE PAST 10 YEARS, SEVEN TO 10 TIMES. MY PARENTS DEFINITELY DID THE BEST THAT THEY COULD, BUT DUE TO EXTERNAL FACTORS, THEY WASN'T ABLE TO HAVE A JOB THAT'S ANY BETTER THAN LIKE A MINIMUM WAGE JOB. SO, LIKE, THE DREAM OF HOME OWNERSHIP IS VERY IMPORTANT TO US. BUT IT WAS LIKE, IT SEEMED VERY IMPOSSIBLE FOR LIKE A PERIOD OF TIME UP UNTIL RECENTLY. REBECCA SENN: I'D SAY WE'RE IN ONE OF THE MOST COMPETITIVE HOMEOWNERSHIP AND HOUSING MARKETS I'VE EVER SEEN. WE SERVE OVER 15,000 PEOPLE A YEAR. WE WORK WITH A HOST OF AFFORDABLE MORTGAGE LENDERS WHO OFFER SOMETIMES 3% DOWN. AND EVEN COMING UP WITH THAT CAN BE TOUGH ON TOP OF CLOSING COSTS, WHICH COULD BE $10,000-PLUS. IT'S A COMPLICATED PROCESS. THERE'S A LOT THAT GOES INTO IT. BAILEY JEREMIE: IT'S VERY STRESSFUL, ESPECIALLY BEING A MIDDLE-CLASS FAMIL I LEARNED THAT THERE WAS AN AFFORDABLE HOUSING OPTION TWO BLOCKS AWAY FROM OUR APARTMENT. SO, IT FELT VERY UNBELIEVABLE. THEY SAY YOU HAVE TO APPLY NOW. YOU HAVE TO MAKE THIS MUCH MONEY. YOU HAVE TO HAVE THIS DOWN PAYMENT. AND WE CHECKED EVERY SINGLE BOX. WE WERE VERY EXCITED. WE TOLD OUR DAUGHTER. WE WERE LIKE, "WE'RE JUST GOING TO MOVE TWO BLOCKS AWAY." YOU KNOW, "MAKE SURE YOU'RE THINKING ABOUT IT AND YOU'RE PLANNING FOR YOUR NEW BEDROOM." AND SHORTLY AFTERWARDS, I THINK IN DECEMBER, WE ACTUALLY GOT A REJECTION. THE PROCESS OF APPLYING TO THE APARTMENT STARTED TO FEEL LIKE A NUMBERS GAME. WE WERE JUST ANOTHER NUMBER. I'VE COME TO ACCEPT THE CONDO IS NOT THE PLACE WE CAN LIVE IN, BUT I'M STILL HOPEFUL HARLEM IS AN OPTION FOR US. O'NEIL EDWARDS: I STARTED ATTENDING A CLASS BY THE HARLEM CONGREGATION. THAT CLASS REALLY TAUGHT ME ALL THE STEPS THAT I NEEDED TO TAKE. I JUST CONTINUED TO LIVE BENEATH MY MEANS AND SAVE AS MUCH MONEY AS POSSIBLE FROM MY INCOME UNTIL I GOT TO A POINT WHERE I HAD ENOUGH FOR A DOWN PAYMENT FOR A PROPERTY. I LIVE ON THE THIRD FLOOR WITH MY GIRLFRIEND. AND ON THE SECOND FLOOR, WE'RE GOING TO GET THAT RENTED OUT TO A TENANT. AND ON THE FIRST FLOOR, I DECIDED TO GIVE THE FLOOR TO MY PARENTS. IT JUST GIVES ME A GREAT SENSE OF PRIDE. LIKE, THIS IS WHERE I STRUGGLE. THIS IS WHERE I MOVE FROM ONE PLACE TO ANOTHER. AND THE FACT THAT I PURCHASED THE PROPERTY AT 26, THAT'S A HUGE DEAL. IT JUST GIVES ME A SENSE OF, LIKE, THIS IS WHERE I BELONG BECAUSE I OWN REAL ESTATE HERE. AND I CAN GENUINELY SAY THIS IS MY COMMUNITY. TH

Last month, CNN's Before the Bell observed early signs that the red-hot global housing market could be starting to cool, as elevated prices appeared to hurt demand and home improvement spending eased.It may have called the top too soon.What's happening? U.S. home prices rose 18.6% in June compared to one year earlier and 16.8% versus May, according to the S&P Corelogic Case-Shiller Index released this week. In Phoenix, home prices jumped 29% year-over-year, while San Diego logged a 27% increase.It's the third month in a row that the rate of house price increases set a record.Video above: How the pandemic is keeping first-time homebuyers out of the marketOver in the United Kingdom, annual house price growth rose to 11% in August from 10.5% in July, according to new data from the Nationwide Building Society. Prices were up 2.1% month-on-month, the second-largest monthly gain in 15 years.In Australia, while there are some signs the housing boom is moderating, home values still rose 1.5% in August, according to CoreLogic's latest Home Value Index. This rate of growth remains "well above average," CoreLogic said. The Reserve Bank of New Zealand, for its part, recently said house prices are "above sustainable levels."What gives? Low borrowing costs and work-from-home upgrades are still supporting demand, even as some would-be buyers scoff at the scale of recent price increases.Yet in a research note published this week, Goldman Sachs emphasized another factor."While low mortgage rates and the shift to working from home are also fueling housing demand, one under-appreciated reason for the price boom is that housing supply is very tight," the investment bank's economists said.Price increases would normally feed a boom in the construction of new houses. But this hasn't materialized, thanks to raw material and labor shortages, as well as land regulations, according to Goldman."While the easing of temporary bottlenecks, such as material constraints and pandemic labor supply effects, should support an eventual recovery in supply ... more persistent constraints, such as land-use regulations, should continue to push up house prices in coming quarters, especially in the U.S., Canada, and UK," the bank predicted.In short: Even if demand starts to waver, supply problems could bolster prices for some time.

Last month, CNN's Before the Bell that the red-hot global housing market could be starting to cool, as elevated prices appeared to hurt demand and home improvement spending eased.

It may have called the top too soon.

What's happening? U.S. home prices rose 18.6% in June compared to one year earlier and 16.8% versus May, according to the S&P Corelogic Case-Shiller Index released this week. In Phoenix, home prices jumped 29% year-over-year, while San Diego logged a 27% increase.

It's the third month in a row that the rate of house price increases set a record.

Video above: How the pandemic is keeping first-time homebuyers out of the market

Over in the United Kingdom, annual house price growth rose to 11% in August from 10.5% in July, according to new data from the Nationwide Building Society. Prices were up 2.1% month-on-month, the second-largest monthly gain in 15 years.

In Australia, while there are some signs the housing boom is moderating, home values still rose 1.5% in August, according to CoreLogic's latest Home Value Index. This rate of growth remains "well above average," CoreLogic said. The Reserve Bank of New Zealand, for its part, recently said house prices are "above sustainable levels."

What gives? Low borrowing costs and work-from-home upgrades are still supporting demand, even as some would-be buyers scoff at the scale of recent price increases.

Yet in a research note published this week, Goldman Sachs emphasized another factor.

"While low mortgage rates and the shift to working from home are also fueling housing demand, one under-appreciated reason for the price boom is that housing supply is very tight," the investment bank's economists said.

Price increases would normally feed a boom in the construction of new houses. But this hasn't materialized, thanks to raw material and labor shortages, as well as land regulations, according to Goldman.

"While the easing of temporary bottlenecks, such as material constraints and pandemic labor supply effects, should support an eventual recovery in supply ... more persistent constraints, such as land-use regulations, should continue to push up house prices in coming quarters, especially in the U.S., Canada, and UK," the bank predicted.

In short: Even if demand starts to waver, supply problems could bolster prices for some time.

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