House prices continue to rise as a result of strong demand and limited supply, and it is uncertain if a market downturn will happen anytime soon.
Indeed, the latest data shows that the median price of existing-home sales has surged by over 30% in just two years. The median price of a home sale stood at $285,000 around March 2020; however, this figure has jumped to $375,300 as of March 2022.
In particular, the median existing-home sales price rose to $375,300, up 15% from one year ago, according to the latest data released on Wednesday, April 20 from the National Association of Realtors (NAR).
Although it had been projected that prices would cool this year, especially in light of the cost of living problem, these new figures have caused some experts to question whether or not the anticipated reduction would take place.
NAR’s chief economist, Lawrence Yun, said:
“The housing market is starting to feel the impact of sharply rising mortgage rates and higher inflation taking a hit on purchasing power. Still, homes are selling rapidly, and home price gains remain in the double-digits.”
Number of home sales fall
Nevertheless, the combination of higher mortgage rates and increasing home prices, combined with a protracted housing scarcity, will make housing less affordable, particularly for first-time home buyers.
Dunleavy, a Senior Research Analyst, pointed out:
“Mortgage rates have increased at the fastest rate ever. It’s hard to meet the monthly payments to maintain an average house sale price of $500,000.”
Home sales in the United States declined more than predicted in March, as house prices reached a record high despite modest improvement in availability. Sales are projected to fall much lower as mortgage rates continue to rise.
The National Association of Realtors also announced that existing-home sales fell 2.7% in March to a seasonally adjusted annual pace of 5.77 million units.
Although contracts signed two to three months ago when the 30-year fixed-rate mortgage was below 4% accounted for the majority of the closings reported in this data.