The U.S. housing market saw its hottest sales scenario in 14 years last year, with home prices across the U.S. recording double-digit gains in January this year, according to the S&P Case-Shiller Home Price Index and Zillow Group data.
Currently, home prices are rising in all regions of the United States. The Standard & Poor’s Case-Shiller Home Price Index shows that the average home price in the nation’s major metropolitan areas rose 11.2 percent year-over-year in January this year, the highest increase since February 2006.
Median home prices in 10 U.S. metropolitan areas rose by more than double digits year-over-year in January, according to online real estate firm Zillow Group. In Boise, Idaho, median home prices rose 25 percent year-over-year in January, while in Stamford, Connecticut, median home prices rose 19 percent year-over-year in January.
The Wall Street Journal reported on April 5 that in March, real estate agent Andrea White listed a three-bedroom home for sale in Sacramento, California, and she received an all-cash offer in less than a day. The buyer was prepared to pay $520,000 without seeing the home in person, which was $21,000 more than the seller’s offer and 37 percent more than when the seller purchased the rustic home two years ago.
White has worked as a real estate agent since 2014 at real estate brokerage Redfin Corp. She said a boom in home sales is sweeping Sacramento that has never been seen before.
The past year has been the hottest sales year in the U.S. housing market in 14 years, the report said.
Mark Vitner, a senior economist at Wells Fargo & Co. (WFC), said, “Home prices are going up almost everywhere.”
The Federal Housing Finance Agency (FHFA) said this week that single-family home prices rose 12 percent year-over-year in January, the largest annual increase since 1991. nine regions across the U.S. tracked by FHFA saw home prices rise more than 10 percent year-over-year.
The National Association of Realtors said the median price of a manufactured home rose 15.8 percent year-over-year to $313,000 in February.
The report believes that the shortage of homes for sale is an important reason for the sharp rise in home prices today. After the subprime mortgage crisis in 2007-2009, the pace of new home construction in the United States has not been able to keep up with the growth in demand, and builders took several years to recover from the financial crisis, while also facing a shortage of land resources and skilled labor.
Realtor.com data shows that the number of homes for sale in March was about half of what it was a year ago. In Austin, Texas; Jacksonville, Florida; and Raleigh, North Carolina, the inventory of homes for sale fell by more than 70 percent year-over-year. realtor.com is operated by News Corp (NWS, NWSA), parent company of The Wall Street Journal.
In addition, mortgage rates are near historic lows. Millions of millennials will soon be in their early 30s, reaching the age of first-time home buyers. In addition, the epidemic has sparked new demand: some homebuyers want more space to work from home, while others want to move further away from the office. Thanks to stimulus checks, student loan repayment relief and reduced travel and entertainment expenses, many people who kept their jobs in 2020 were able to save for a down payment.
New listings generally don’t wait long as homebuyers bid up the price. Nearly three-quarters of the homes sold in February were listed for sale for less than a month, according to the National Association of Realtors.
Realtors say more homes are likely to be listed for sale this spring, which is usually the peak season for home sales. But it’s unlikely there will be enough new listings to cool the market. According to the National Association of Realtors, at the end of February, it took just two months for homes listed nationwide to sell out, near record lows.
Sales in high-priced cities where property sales plummeted last spring are also showing signs of growth. Manhattan co-op (co-op) and condominium (condo) sales in the first quarter of 2021 exceeded year-earlier levels for the first time in four quarters, according to brokerage Douglas Elliman. Home sales in San Francisco rose 19 percent year-over-year in February, according to Redfin.
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