Are you following the latest trends in the housing market? If not, you’re missing out on some important information that could impact your investment decisions. Home prices hit another record high in April, despite the rise in mortgage rates and an increase in the supply of homes for sale. This may seem unusual, but the current housing market is unique in many ways.
According to the S&P CoreLogic Case-Shiller National Home Price Index, home prices in April rose by 6.3% compared to the previous year. This marks the second consecutive month that the national index has reached a new all-time high. Even with the average rate on a 30-year fixed mortgage jumping from 6.9% to 7.5% in April, prices continued to rise.
Experts like Brian Luke, head of commodities, real and digital assets at S&P Dow Jones Indices, are closely monitoring the market activity. He noted that the housing market is at an all-time high, despite the typically busy summer and fall months approaching.
This continuous increase in home prices has made housing more unaffordable than ever before. The Harvard Joint Center for Housing Studies reported that home prices are now 47% higher than they were in early 2020, with the median sale price now five times the median household income. For renters, prices are 26% higher than in 2020, with more than half of all renter households spending more than 30% of their income on housing.
While rent growth is slowing due to an increase in new apartment units, renters are still feeling the pinch. Homeowners are also facing challenges, with 20 million considered cost-burdened by their monthly payments.
Housing supply has seen an increase in recent months, with new listings up by 11% in April compared to March. While this may seem like a significant jump, supply remains low compared to demand. Zillow reports that total for-sale inventory is up by 18% year over year.
The rise in mortgage rates in April has pushed housing affordability further out of reach for many potential buyers. However, homes that were priced well sold quickly, with some selling in just 13 days.
As we head into May, inventory has risen to a 3.7-month supply. A six-month supply is considered a balanced market between buyers and sellers. Stay tuned to Extreme Investor Network for more updates on the housing market and investment opportunities you won’t find anywhere else.