ResiClub co-founder and editor-in-chief Lance Lambert talks about the US housing affordability crisis on “Making Money.”
Home prices hit a new record in April. Housing shortageThis is despite rising mortgage rates putting home buying out of reach for more Americans.
The S&P CoreLogic Case-Shiller index showed Tuesday that national inflation rose 6.3% year-over-year in April, down from 8.3% the previous month.
On a monthly basis, prices rose 0.3%, according to the index.
“For the second consecutive month, domestic stock indexes have surpassed their all-time highs by more than 1%,” Brian Luke, head of commodities, real and digital assets at S&P DJI, said in a statement. “As we head into summer, markets are at record highs, once again testing their resilience against historically active periods.”
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A home in the Issaquah Highlands neighborhood on Tuesday, April 16, 2024 in Issaquah, Washington. (Photographer: David Ryder/Bloomberg via Getty Images/Getty Images)
Composite home prices in 10 cities, including Los Angeles, Miami and New York, rose 8% from a year ago, up from an 8.3% increase in March. Composite home prices in 20 cities, which also track home prices in Dallas and Seattle, rose 7.2% from a year ago, also up from a 7.5% increase in the previous month.
Prices rose in about half of the 20 major metropolitan areas tracked by the index.
“Last month’s all-time highs were reached as price growth accelerated across all 20 markets,” Luke said. “More than half of the markets have seen price growth accelerate on a monthly basis this month.”
of Biggest price increase San Diego again recorded a 10.3% increase over last year, followed by New York and Chicago with increases of 9.4% and 8.7%, respectively.
Why can’t I find any homes for sale?
Portland, Oregon, had the slowest home price growth in April, up just 1.7% from a year ago.
A sign outside a home for sale on Sept. 6, 2023, in Atlanta, Georgia. (Photographer: Elijah Nouvellege/Bloomberg via Getty Images/Getty Images)
The Case-Shiller Index is released with a two-month lag, so it may not reflect the latest market trends.
There are several factors behind the rise in home prices: Years of a housing shortage led to a housing shortage in the country, which was then followed by a housing price boom that made homes even more expensive. Mortgage interest rates soar and expensive construction materials.
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Rising mortgage rates over the past three years are also creating a “golden handcuff” effect on the housing market: Sellers who locked in record-low mortgage rates of less than 3% at the start of the pandemic are becoming reluctant to sell, further restricting supply and leaving eager would-be buyers with few options.
Economists predict mortgage rates will remain high into 2024 before starting to fall. Federal Reserve Even if they start cutting rates, they are unlikely to return to the lows seen during the pandemic.
