WOW: US home prices have soared 47% since 2020.
Despite mortgage rates skyrocketing to around 7%, double what they were at the peak of the pandemic, home prices refuse to plateau.
That’s due the insatiable appetite for housing coupled with a crippling shortage in supply.
“Because the Fed kept rates too low for too long during the pandemic, listing inventory was essentially wiped off the map, keeping prices rising sharply despite the surge in mortgage rates,” appraiser Jonathan Miller told The Post. “Would-be home sellers that bought or refinanced at a 2.5% to 4% rate during the pandemic became trapped due to the lock-in effect. They became reluctant to list their homes because, as new buyers, they would get a lot less for their money because of the much higher mortgage rates. The way out of this appears to be to hope for a drop in mortgage rates, but that could take years.”
To put things in perspective, the median US home sale price hit $420,800 in the first quarter of this year. Compare that to a modest $327,100 at the beginning of the decade. It was $124,800 at the dawn of the ’90s.
Lance Lambert, co-founder of ResiClub, says housing price growth in the first 50 months of this decade has outpaced not just one, but the last three decades combined.
I’d hate to be a young couple trying to buy a first house and start a family.
Related? Suddenly There Aren’t Enough Babies. The Whole World Is Alarmed. “In the U.S., a short-lived pandemic baby boomlet has reversed. The total fertility rate fell to 1.62 last year, according to provisional government figures, the lowest on record.”
Unaffordable housing is far from the only reason young people aren’t having enough kids but it’s on the list.