Latest News / New Highs in Housing Prices
New Highs in Housing Prices
November 4, 2021
Based upon the June economic reports, the national house-buying frenzy is cooling down a bit, yet new records are still being notched. For example:
• existing home sales rose 1.4% in June compared to May, but were up 22.9% from June during the 2020 pandemic;
• the median existing-home price reached a record $363,300, up 23.4% from the year-earlier June;
• June sales of homes for more than $1 million were double the year-earlier figure; and
• housing starts rose 6.3% in June compared to May.
Many factors have contributed to the increasing prices and occasional bidding wars for homes for sale. The most important is likely low current interest rates, which help to hold down monthly payments. Buyers may have a sense that they have to move now, before rates increase. Existing homeowners may want to use their increased equity to trade up to a larger house. After the pandemic, when millions successfully fulfilled their job requirements by working at home, many felt a need for different quarters to continue in that mode. Another crucial factor is a severe shortage of homes for sale. There were 1.25 million homes for sale at the end of June, which represents an 18.8% drop in inventory from a year earlier. Labor and materials shortages have hampered efforts by home builders to satisfy the pent-up demand with new houses.
Higher prices have drawn some homeowners to put their houses on the market, and as supply increases the frenzy should abate. There are signs of buyers worrying about overpaying in some markets.
The harder question is, what happens when the Federal Reserve raises interest rates? Will housing prices stabilize, or actually begin to fall? Is this a bubble that might burst?
© 2021 M.A. Co. All rights reserved.
Check the background of this investment professional on FINRA’s BrokerCheck
Located at: 600 E 84th Avenue Merrillville, IN 46410
Phone: (844) 755-6600
Securities and insurance products are offered through Cetera Investment Services LLC (doing insurance business in CA as CFG STC Insurance Agency LLC), member FINRA/SIPC. Advisory services are offered through Cetera Investment Advisers LLC. Neither firm is affiliated with the financial institution where investment services are offered. Individuals affiliated with this broker/dealer firm are either Registered Representatives who offer only brokerage services and receive transaction-based compensation (commissions), Investment Adviser Representatives who offer only investment advisory services and receive fees based on assets, or both Registered Representatives and Investment Adviser Representatives, who can offer both types of services.
These products and services are being offered through Cetera Investment Services LLC or its affiliates, which are separate entities from, and not affiliates of, Centier Bank or Centier Investments. Securities and insurance products offered by Cetera Investments are: *Not FDIC/NCUSIF insured *May lose value *Not financial institution guaranteed *Not a deposit *Not insured by any federal government agency.
This site is published for residents of the United States only. Registered Representatives of Cetera Investment Services LLC may only conduct business with residents of the states and/or jurisdictions in which they are properly registered. Not all of the products and services referenced on this site may be available in every state and through every advisor listed. For additional information please contact the advisor(s) listed on the site, visit the Cetera Investment Services LLC site at www.ceterainvestmentservices.com