Due to low inventory, home prices in America increased 6.5% in March compared to the same month last year, setting a new record.
In March, US housing prices reached yet another new high.
US home prices reached a new high in March, a sign of the continuous housing market’s affordability crisis.
S&P’s Core-Shiller Case Tracking residential prices across the country, the US National Home Price Index hit a record high in March, up 6.5% from the year before. The index has reached a new all-time high six times in the last year.
The survey indicates that large cities like Los Angeles, New York, San Diego, and Cleveland have a substantial need for housing. The 20-city index increased in March at a somewhat faster rate than it did in February.
The chairman of S&P Dow Jones Indices’ digital assets, real estate, and commodities, Brian Luke, said that “this month’s report boasts another all-time high.” “Over the past year, both the stock and housing markets have seen record breaking on multiple occasions.”
The housing business is confronted not just with continually high real estate expenses but also with a persistent shortage of available dwellings and excessive loan rates. The property market has become challenging as a result of all of this, especially for first-time buyers.
Continued difficulties, but a few little advancements
The state of housing affordability, which takes into account mortgage rates, home prices, and salaries, is still dire. However, there have recently been a few positive developments.
A 30-year fixed-rate mortgage’s average rate dropped below 7% last week following a spike in rates in the middle of April. Nevertheless, mortgage rates are greater than they were in the ten years preceding 2022. Mortgage rates are unlikely to decrease significantly this year, according to economists, and they may even stay above 6%.
This is because the Federal Reserve had to postpone its interest rate drop due to inflation becoming stuck earlier in the year. Right now, the Federal Reserve’s benchmark interest rate is higher than it has been in more than 20 years. Mortgage rates are influenced by the central bank’s actions even if it does not directly set them. The yield on the 10-year US Treasury note is a good indicator of when the Fed will change policy, and this is how mortgage rates are determined.
The exorbitant cost of real estate has been a recurring problem for purchasers. Although annual home price growth has slowed since reaching a record high of 20.8% in March 2022, it has accelerated in recent months. There have only been two months since the spring of 2022 when housing values have decreased.
There has been some steady improvement in prices this year, but a persistent shortage of homes is still a major contributing factor. According to data released by the National Association of Realtors last week, there were 1.21 million total housing units in the market as of the end of April, an increase of 9% from the previous month and 16.3% from the same time last year. That, however, analysts warn, is nowhere near enough to meet demand.
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