Inventory shortages continue to push up home prices, exacerbating affordability concerns.
A new report from Realtor.com indicates that August home prices rose by 0.7 percent, upsetting the previous two months of year-over-year declines.
Contributing to this hike may be the 7.9 percent drop in inventory compared with last year and a 48 percent plunge in inventory levels from 2017 to 2019. The report also indicates that home sellers were less active last month, with 7.5 percent fewer listed homes than in the same period in 2022.
“Inventory remains persistently low, even with record-high mortgage rates putting a damper on demand,” Danielle Hale, chief economist for Realtor.com, said. “The inventory crunch continues to put upward pressure on home prices, amplifying affordability concerns and shutting some potential buyers out of the market.”
Rocket Mortgage reported that current interest rates are hovering between 7 and 7.5 percent.
Dottie Herman, vice chair of Douglas Elliman, told The Epoch Times that lack of adequate inventory is one of the major reasons for the rise in home prices. “There’s not much out there. And when you have more buyers than sellers, the prices are going to remain high,” she said. “We’re still seeing bidding wars, although not to the extent of those during the pandemic when we had 20 or more offers.”
Ms. Herman, based in New York City, also indicated that higher mortgage rates are keeping many homeowners in their present locations.
“A lot of people refinanced to get those 3 percent rates two years ago, so now even if they’d like to sell and move elsewhere, they’re not going to put their homes on the market and give up those low rates,” she said.
In her experience, the autumn market doesn’t usually pick up until late September or early October. “It doesn’t matter whether people live in New York, Florida, or out West, because kids are going back to school or college, and parents are focused on that,” she said.
The Realtor.com report also shows that California still commands some of the country’s highest priced homes, with the San Jose-Sunnyvale-Santa Clara area topping the median sales prices at $1.474 million. The San Diego-Chula Vista-Carlsbad region is a close second with a $1.099 million median sales price, followed by San Francisco-Oakland-Berkeley at $1.049 million. The New York-Newark-Jersey City area is significantly lower, with a median home sales price of $717,000.
By Mary Prenon
