A recent analysis by ResiClub of the Case-Shiller National Home Price Index has unveiled a jaw-dropping surge in US home prices, soaring a lofty 47.1% since the dawn of this decade.
The boom witnessed in the early years of the 2020s has outpaced not only the growth of the 1990s and 2010s — but is now threatening to surpass the entirety of the 2000s.
Even the dizzying heights reached before the 2007 housing market meltdown are within striking distance.
This decade’s housing market frenzy was ignited by a perfect storm — the onset of the COVID-19 pandemic triggering an unprecedented rush among buyers.
The result? A staggering 20% surge in prices within a mere 12 months.
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.
It’s all an unfortunate cycle of events for those looking to achieve the American Dream — and for one age bracket in particular.
Recent research reveals that millennials, more than any previous generation, perceive true success as synonymous with homeownership. A February Bank of America Homebuyer Insights Report highlights that millennials prioritize homeownership more than their parents did at a comparable age.
Their goals persist despite languishing high interest rates meant to combat nagging inflation. Older millennials also face heightened financial strain due to a substantial share of outstanding student loans and a notable increase in credit card delinquencies.
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