According to the National Association of Realtors, sales of existing homes fell by 7.2 percent in January, seasonally adjusted, and were down 2.4% year-over-year. After sales increased by 6.7 percent in January, this is a significant decrease.
In February, the median price of single-family homes in the United States was $357,300. This is an increase of 15 percent from last year’s time. According to the trade group, this is the 120th consecutive month with year-over-year price increases. This streak is the longest on record.
Lawrence Yun (chief economist at the National Association of Realtors) stated that housing affordability remains a challenge. He said that buyers are facing a double whammy of rising mortgage rates and price increases.
There are some signs that the market is starting to relax. The total housing inventory increased by 2.4 percent in February after hitting a record low of 15.5 percent in January. Although it is still 15.5 per cent below the same period 2021, more homes are being constructed. According to the National Association of Home Builders, new home construction increased 6.8% in February compared to the previous month, and rose 22 percent compared with the same period last years. This is despite years of underbuilding. This is the fastest pace since 2006. According to Census Bureau data, although permits for building fell 1.9 percent in January, they rose 7.7 percent over the same time last year.
High construction costs and rising interest rates continue to worry builders. This week’s average rate on a 30-year loan was 4 percent, which is the highest rate since May 2019. As interest rates rise, more increases are expected. However, they won’t slow down bidding wars on hot markets.
Taylor Marr, Redfin’s deputy chief economist, stated that many households had difficulty finding starter homes in smaller sizes and at lower prices. “Buyers cannot afford to continue this level of price rise, so some buyers may be priced out.”
According to a Redfin analysis, 6 million homes have been valued at $1million or more in February. This is an increase of just 3.5million homes compared to two years ago. Based on Zillow’s home values index, almost 150 cities, including Brentwood, Tennessee and Haley, Idaho, saw their average home value surpass $1 million last year.
Nicole Bachaud, Zillow’s economist, stated that the total number of million-dollar cities in the world is 481 so adding almost 150 is a big jump and one of our largest ever.” We’ll see an identical number, or even more, in 2022 due to the high appreciation and rapid market movement.
Roger Pettingell, a broker at Coldwell Banker Realty Sarasota Florida, is the author. According to Pettingell, home prices rose dramatically as more homebuyers moved in from the Northeast and California during the pandemic.
Pettingell stated that “these new buyers aren’t looking for the same things as previous clients.” They want dual offices and home gyms. “Home theaters are back.”
According to Zillow, between 2020 and 2021 the average Holmes Beach home value jumped from $748181 to $1,081,872.
Pettingell, who has been a local broker for 35 years, said that he’s never witnessed home prices so rapidly rise. He said, “It’s difficult to talk about affordable housing exist anywhere.”
According to Zillow, Waukesha’s Lac La Belle village home values ranged from $950,562 to $1.1 million in 2020, to just over $1.1 million in 2017.
John Gscheidmeier, a broker at RE/MAX Service First, Waukesha said, “I have seen prices appreciate, but not nearly as much as this.” People don’t believe that there is enough money in the Midwest. Let’s face it, you can live anywhere and work for a tech company in California.