Home prices in the US have been soaring at a record rate, jumping nearly 23% in the second quarter of 2021 against last year’s figures, data from the National Association of Realtors (NAR) shows.
The average price of a single-family house jumped to a quarterly all-time high of $357,900 in the second quarter, an increase of $66,800 from one year ago or 22.9%, according to a report released on Thursday. With the price tag this high, potential buyers have been struggling to find affordable properties. This led to sales of previously owned homes falling for four consecutive months from February to May.
Overall, existing-home sales rose 1.4% in June from the previous month to a seasonally adjusted annual rate of 5.86 million.
“Home price gains and the accompanying housing wealth accumulation have been spectacular over the past year,” chief economist for the realtors group Lawrence Yun stated in the report, citing the low number of sales listings amid increased demand as one of the factors of the price hike. He noted, however, that the trend is unlikely to continue through 2022, as “there are signs of more supply reaching the market” in the near future.
According to the group’s data, around 94% of the 183 metropolitan areas that were assessed by NAR showed double-digit gains, against 89% in the first quarter of the year. Nationwide, 12 areas showed price hikes of more than 30%. The only area where home prices decreased was Springfield, Illinois, down 7%.
According to the report, despite historically low interest rates, the price hikes have severely impacted first-time buyers’ purchasing opportunities. Among these, the monthly mortgage payment for a loan with a 10% deposit soared to 25% in the second quarter against 21% the same time last year. The monthly mortgage payment on an average single-family home rose to $1,215, increasing the minimum income for a family to afford a purchase to $58,314. According to NAR’s June report, first-time buyers represented 31% of sales, down from 35% a year ago.
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