Prices Increase Despite More Homes on Market
During the peak of the pandemic, real estate sales were generally slow. Many people who wanted to leave crowded cities did so, resulting in fewer homes being listed for sale. Even the homes that were on the market weren’t attracting many buyers. However, this decrease in activity led to a rise in the value of real estate, which has remained high as more people are now buying homes.
In June, home prices reached a record median value of $363,300, showing a 23% increase compared to the same time last year and hitting an all-time high. Despite this, there were about 1.25 million homes for sale in the United States by the end of June, which is actually 18.8% less than a year ago.
“The supply has slightly improved in recent months due to more housing starts and existing homeowners putting their homes on the market, leading to an increase in sales,” said Lawrence Yun, the chief economist of the National Association of Realtors, in an interview with CNN. “Home sales are now happening at a pace higher than pre-pandemic levels.”
In June, sales of previously owned homes in the U.S. increased, breaking a four-month decline streak. Strong demand for higher-end properties and historically low mortgage rates contributed to pushing prices to new highs. https://t.co/yHB6dOr2a6
— ABC News (@ABC) July 23, 2021
“Overall, home prices are not expected to decline due to limited inventory, but I anticipate a slower appreciation in prices by the end of the year,” Yun stated. “Ideally, home prices should increase in line with income growth, a trend likely to occur in 2022 with more listings and new construction becoming available.”
“The substantial gains in wealth from housing equity and the stock market have increased the number of all-cash transactions. However, first-time buyers relying on mortgage financing are facing significant challenges due to the high home prices and low inventory,” Yun added. “Though mortgage rates are low, these obstacles have made it difficult for some potential buyers to enter the market.”
