Home prices continue to rise as demand stays high. While builders are working to bring the supply up, low mortgages and the country’s historic home inventory deficit mean that there is still a great deal of imbalance between supply and demand.
The S&P CoreLogic Case-Shiller National Home Price Index, which measures the price of homes in the United States’ largest metro areas, was up 13.2% over the previous year this March. In the year ending in February 2021, it had gone up 12%. March’s numbers are the highest since 2005.
Phoenix and San Diego showed the greatest increase in prices, at 20% and 19.1% respectively. Recently released date from the Federal Housing Finance Agency corroborates Case-Shiller numbers. According to the FHFA, home prices in March were up 13.9% from the previous year, the greatest annual increase ever recorded in their data.
This increase has been seen in both new and existing home sales. The median price on a new home was up to $372,400 in April, 2021. This is an increase of 20.1% compared to April, 2020. The median price on existing home sales was also up sharply in April to $341,600, a 19.1% yearly increase.
Building is increasing, which will help to alleviate prices. But it will likely be several years before the current lack of available homes is remedied. In the meantime, this imbalance in supply and demand is beginning to price some would be buyers out of the market. According to the Commerce Department, only 27% of the homes sold this April were under $300,000. Last April, it was 45%.