Single-family home prices are finally softening across the US, but the cost of homeownership remains staggeringly out of reach for many consumers, particularly millennials. And while "significant price collapses" are not likely due to ongoing supply-demand imbalances, the recalibrating single-family home market will continue to benefit the multifamily asset class.

Inventories shrunk exponentially in the early days of the pandemic as would-be buyers sought to take advantage of low interest rates and an expended prevalence of work-from-home policies. That supply-demand imbalance caused the cost of an existing single-family home to rise for 24 straight months through May 2022, according to new research from Marcus & Millichap — but that streak ended over the past few months as the volume of home purchases slowed and borrowing costs rose.

The average 30-year fixed-rate mortgage hit the mid-5 percent range during the first half of the year after starting 2022 near 2 percent.  And the minimum annual income needed to buy a median-priced house is now well above $100,000, "a benchmark that about three-fourths of U.S. households fall short of," according to Marcus & Millichap.