Prices increased even as more homes became available.
At the height of the pandemic, real estate sales were, in general, unfavorable. Anyone who wanted to get out of crowded cities did so promptly, and afterward, everyone remained steadfastly where they were. This resulted in far less homes going on the market, and even the homes that were on the market weren’t attracting buyers. However, this lack of business has led to an increase in valuation in the real estate industry, and that increase has held fast even as people start buying homes again.
As of last month, home valuations hit a record median value of $363,300, a 23% boost over this time last year, as well as an all-time high. By the end of June, there were approximately 1.25 million homes for sale in the United States, though that’s actually 18.8% less than a year ago.
“Supply has modestly improved in recent months due to more housing starts and existing homeowners listing their homes, all of which has resulted in an uptick in sales,” Lawrence Yun, chief economist of the National Association of Realtors told CNN. “Home sales continue to run at a pace above the rate seen before the pandemic.”
Sales of previously occupied U.S. homes rose in June, snapping a four-month losing streak, while strong demand for higher-end properties and ultra-low mortgage rates helped push prices to new highs. https://t.co/yHB6dOr2a6
— ABC News (@ABC) July 23, 2021
“At a broad level, home prices are in no danger of a decline due to tight inventory conditions, but I do expect prices to appreciate at a slower pace by the end of the year,” Yun said. “Ideally, the costs for a home would rise roughly in line with income growth, which is likely to happen in 2022 as more listings and new construction become available.”
“Huge wealth gains from both housing equity and the stock market have nudged up all-cash transactions, but first-time buyers who need mortgage financing are being uniquely challenged with record-high home prices and low inventory,” Yun said. “Although rates are favorably low, these hurdles have been overwhelming to some potential buyers.”