Bad news, homeowners: 1 of these 3 things needs to happen for house prices to be considered affordable, says a real estate expert

• Andy Walden of ICE Mortgage Technology told CNBC there are 3 key ways to make US home prices affordable.
• He said it'll take a 35% correction in US home prices, a 4% decline in mortgage rates, or a 55% hike in income to normalize the property market.

The US housing market is getting so expensive that it will take a lot for prices to be considered affordable.

Specifically, it'll take either a 35% correction in home prices, a 4% decline in 30-year mortgage rates, or a 55% hike in income to normalize the market, Andy Walden, the vice president of enterprise research for ICE Mortgage Technology, told CNBC last Tuesday.

"Those are massive movements that we're talking about," Walden told CNBC. "None of them are going to happen in a vacuum. None of those one single factor is going to make the move," he added.

Walden's comments came as US home sales have continued to fall even as prices remain strong.

In August, new home sales plunged 8.7% to a seasonally adjusted annual rate of 675,000 units from a month ago, according to the latest data from the US Census Bureau.

While August new home sales were up 5.8% from a year ago, just 16% of consumers consider now a good time to buy a home, according to Fannie Mae's latest Home Purchase Sentiment Index released Monday.

That's even though the value of the US housing market has surged about 50% from the pre-pandemic days in January 2020 to nearly $52 trillion now, Zillow reported on September 26.

"Demand has hit its lowest point during the pandemic over the last three weeks, certainly kind of constraining the market and affordability at its lowest level in 40 years," Walden told CNBC. "You're seeing this constrained demand and further constrained expected from these rising rates."

The average 30-year fixed mortgage rate hit a 23-year high of 7.49%, according to the most recent Freddie Mac data.

Despite dampened consumer demand, Walden said the market's direction depends on how much inventory enters the market amid a supply crunch.

"The big question when it comes to how will the market react is what's inventory going to do? Are we going to see any kind of inventory building here over the next few months?" he told CNBC.

"If so, yeah, it could cool prices down. If not, you're going to just see this stalemate play out in the market," Walden added.