US home prices continue to rise at record rates
May marks third consecutive month growth rate hit all-time high
Brown Harris Stevens CEO Bess Freedman weighs in on home prices soaring as supply shrinks and demand peaks.
The real estate market continues to notch what experts are characterizing as unprecedented levels of price growth, after another month of gains was recorded in May.
May’s home price growth rate overtook April’s at an annualized pace of nearly 18%, compared with 14.8% the month prior, according to a new report from data analytics firm Black Knight.
May marks the third consecutive month that the growth rate for home prices hit an all-time high.
Early data the firm is tracking from June suggests further growth is likely.
"Frankly, home values are appreciating at rates we’ve simply never seen before, as low interest rates, ultra-scarce inventory and increasingly competitive homebuyers combine to create a truly unprecedented market," Black Knight’s Data & Analytics President Ben Graboske said in a statement.
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May’s 2.1% monthly increase in home prices is also the largest monthly increase ever.
Graboske noted that price appreciation has been widespread and recorded in each of the nation’s 100 largest metro areas.
The average U.S. home is up more than $33,000 – or 10% – in the first five months of the year and $63,000 since the beginning of the pandemic, Black Knight said.
Limited inventory has contributed to rising prices, while remote work flexibility has also allowed some workers the ability to leave densely populated metro areas in search of homes in the suburbs.
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The median price of homes sold in the first quarter of 2021 was $347,500, according to the St. Louis Federal Reserve. Average prices – as opposed to median prices – were notably higher in the Northeast at $603,700 and West at $504,400 during the same time period.