Home prices have increased by a whopping 15.4%. From just April 2021 to May 2021 alone, they have gone up 2.3%. The last time we have seen such an increase was in May of 2005!
This market is ideal for homeowners, since the growth is impeding the market. This is mainly due to many prospective sellers holding off on putting their homes up for sale. In addition, this type of market is also beneficial in keeping mortgage rates low, resulting in a lack of inventory. It has led to tough competition from bidders and is keeping many first-time home buyers waiting on the sidelines.
According to experts, first-time buyers are unable to make progress in many places around the U.S. as the pace of increasing home prices outpaces the benefits of lower borrowing costs. While still on the increase, home prices are predicted to grow by just 3.4% by May of 2022.
We are seeing that there are demand and supply imbalances fueled by a drop in mortgage rates to less than one-half what they were in 2005. This, along with a scarcity of homes for sale, has contributed to the increase in sale prices.