Source: Fortune
Summary
The median price of an existing home in the US has reached a record high of $408,800 in March, according to the National Association of Realtors. This is the 33rd consecutive month of price increases, despite a 3.6% drop in sales from February. The housing market remains constrained by low inventory, with a shortage of around 4.7 million homes. Home prices have risen 60% since pre-pandemic levels, making it difficult for buyers to afford homes.
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The numbers tell one story. Home prices continue to rise, but sales are slowing down. The market is still operating at 80% of its normal spring pace, with sellers pricing their homes above what buyers can afford. Lower consumer confidence and softer job growth have sidelined buyers, while homeowners have accumulated significant housing wealth.
The mismatch between buyers and sellers is growing, with a 30% increase in the gap between the two from last year. The threat of higher oil prices due to the Iran war is keeping mortgage rates elevated, further reducing affordability. The typical homeowner has gained $128,100 in housing wealth over the past six years, but many young buyers are relying on “the Bank of Mom and Dad” to help them purchase a home.
Author: Evan Null
