Nationally, housing affordability declined 7% on a year-over-year basis in April, dragged down by multiple-offer bidding wars and low housing supply.

While incomes are expected to increase in the months to come as the economy continues to improve, Fleming said it’s unclear if it will reach the pace needed to offset the potential for rising mortgage rates.

But Fleming is sure about one thing – it will take years for supply to catch up to demand. He noted that the existing demand would quickly absorb any new housing inventory. “So, significant housing supply relief is unlikely in the near term,” he said.

“More important is the outlook for nominal house price growth. While nominal house price growth may moderate due to the affordability squeeze on buyers who are on the margin, the severe supply-demand imbalance means the housing market is unlikely to cool enough to result in a material improvement in affordability,” said Fleming. “Even if demand moderates due to an affordability squeeze, it will take time for supply to catch up with demand, keeping house price growth positive. So, should you buy now or wait? Real estate is local, and affordability will depend on where you are, but affordability is likely to worsen before it improves, so try to buy it now, if you can find it.”