Illustration: Aïda Amer/Axios

The real estate market should be experiencing a boom — but it's not. In fact, the U.S. housing market has been stagnant for the last 3 years and is beginning to turn lower, data shows.

Why it matters: Anyone who bought residential property in the last 40 years, even at the height of a bubble, has been able to count on rising home values. But those days may be over: Real estate prices have far outpaced incomes and lost their correlation to them.

  • For typical homeowners, "wealth will not increase as fast as it did in previous years, as on average the growth in property prices is close to an end," Maciej Skoczek, real estate analyst at UBS Global Wealth Management, tells Axios.
  • "Those who buy a city apartment at current high valuations are likely to have to adjust to a lengthy lean period."

Why there should be a boom: The generation that's reaching prime home-buying age is large by historic measures; mortgage rates are near historic lows; housing price growth has slowed to a standstill; the unemployment rate is the lowest it has been in 50 years; and wages are rising at the fastest pace in a decade.

What's happening instead: There is a serious lack of qualified and/or interested buyers. And even with ultra-low mortgage rates, prices are not falling enough to bring in new customers.

  • There are also meaningful changes in the makeup of the prime-age potential homebuyers — who now have more debt than ever, are more likely than before to live with their parents, and are reconsidering the attractiveness of a mortgage.

And there's an inventory problem. Not enough affordable single-family homes are being constructed, and builders are focusing their efforts on large, expensive projects, Robert Dietz, chief economist for the National Association of Home Builders, argues.

  • Declining worker productivity, labor shortages, and regulatory costs also are putting a dent in housing supply.
  • As older, more skilled workers retire and younger, less skilled builders take their place, this problem is likely to get worse.
  • "I’ve told the industry we’re going to see worker productivity go down before it goes up," Dietz says.

The combination of inflated prices and overburdened Americans has translated to fewer home sales today than in the year 2000, Lawrence Yun, chief economist at the National Association of Realtors, notes.

  • "We take a survey of consumers and ask the question, 'Is it a good time to buy?' The number of people who say it’s a good time has overall been turning down."

The bottom line: The world is changing. It's "the end of the boom," Skoczek says.

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