Housing prices are sky-high and keep climbing
National housing shortage showing no signs of easing
Seasonal home prices increase 19% year-over-year
Fox Business' Ashley Webster reports on the surging demand for second homes.
Home prices, already through the roof, are expected to keep climbing.
A national housing shortage is showing no signs of easing and the cycle is not expected to break anytime soon.
"We expect a persistent imbalance between supply and demand in the housing market to generate double-digit home price appreciation this year and next," wrote Ronnie Walker, economist at Goldman Sachs.
The median existing-home price in April was up 19% from last year to $341,600, according to the National Association of Realtors. The price surge came as city dwellers fled to regional hubs and the more socially-distant suburbs after being given the opportunity to work from home indefinitely amid the COVID-19 pandemic.
A national housing shortage is showing no signs of easing and the cycle is not expected to break anytime soon. (iStock)
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The flight to the suburbs pushed total housing inventory down 21% from a year ago to 1.16 million units, according to NAR. Unsold inventory was 2.4 months, holding near a record low.
Existing-home sales account for more than 90% of total home sales.
"Existing homeowners continue to stay in their homes because they have to find something to buy as well, which is very difficult with such a limited supply market," said Odeta Kushi, deputy chief economist at First American Financial Corp.
Americans looking to build a new home are also confronted with difficulties.
"Build times have elongated a bit with supply chain disruptions and some of the labor availability," said Bill Wheat, chief financial officer at D.R. Horton Inc.
Lumber prices have soared by as much as 316% since the start of 2020 as the pandemic resulted in supply chain bottlenecks and strong demand for building projects, both new construction and home improvements.
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The surge in lumber prices added $36,000 to the cost of building an average-sized home. And that’s if you can find someone to build it. The industry is also dealing with a shortage of workers and, in some areas, a lack of adequate land to build on.
America has been "underbuilding for a decade, and so that points to a continuation of the supply-demand imbalance, which points to further house price appreciation," Kushi said.