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Home Prices Soar

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Home Prices Soar, Leaving Budget Conscious Buyers in the Dust

Home Prices Soar, Leaving Budget Conscious Buyers in the Dust

This report closely mirrors the January Redfin estimate of 5.3% increase of 2017 home prices as compared to 2016 home prices. The Home Sale Price explosion is not actually the main issue; the bigger issue is that the housing inventory is priced higher, at the same time that credit requirements have tightened. This makes home ownership unattainable by the largest market of first time homebuyers – the millennials.

According to the NAR, sales of existing home prices under $100,000 dropped 7 percent from the previous year. Sales of homes with prices between $100,000 and $250,000 rose just 2 percent. In a simultaneous wealth gap and supply crunch, sales of million-dollar homes burst nearly 30 percent over last year and sales of home prices over $500,000 spiked over 20 percent higher than the same period in 2016. With home buying prices leaping past the mid-range, fewer renters are able to transition into home ownership.

As Yun, chief Economist for the NAR noted, “We are essentially stuck at a 50-year low in the homeownership rate.” Overall housing equity has increased from about $6 trillion to over $13 trillion in the past five years. Unfortunately, there is a great divide between the homeowners with gains of equity in their home, and non-owner renters who lack the benefit of home equity gains.

If you want to buy a new home now, you are in a Seller’s market. Per Svenia Gudell, chief economist at Zillow, “current buying conditions in many markets are terrible, with sellers in complete control and buyers forced to contend with cutthroat competition and intense pressure to make a deal.

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