With Record Price Increases and Low Inventory, Home Sales May Start Slowing
April 27, 2021
The median price for an existing home saw a record-breaking annual price in March, jumping 18.4% to $334,500. The surge in prices is being driven by record-low inventory and ultra-low mortgage rates.
However, even with attractive lending rates, buyers are finding themselves priced out, and some sellers are becoming more hesitant to sell, unwilling to enter a fierce buying market themselves, where the average property is selling in just 18 days, a record low.
Sales of existing homes for the month missed expectations. Actual sales in March totaled 6 million, well below the 6.2 million analysts had expected. This translates to a month-over-month decline of 3.7%, following a 6.3% in February. Mortgage demand last week was at the lowest level in more than two months.
With such high prices and so little supply, some analysts think we may be seeing the limits of how fervent demand is, and price growth may begin to decelerate in the coming months.