This past August, the Federal Housing Finance Agency said that a “tight inventory” of homes was a primary contributor to the 1.6% increase in single-family home prices in the second quarter and the 6.6% increase year-over-year. The FHFA’s findings are consistent with data compiled by the National Association of Realtors, which believes that the current supply of new homes is much too low.
The vast majority of states, plus the District of Columbia, saw median housing prices increase in the past year. The FHFA ranked Florida fourth in Y-O-Y housing price increases (9.4%), behind Idaho (10.3%), Colorado (10.4%), and Washington (12.4%).
While single-family home sales are overall on the rise, when compared with the size of the current US population, the amount of sales is relatively and historically low. However, since construction is not currently meeting the population’s need for new, affordable housing, median housing prices continue to increase despite the slump in sales.
In the past year, a net 2.2 million jobs have been created in the US, providing a new crop of home buyers. A tight housing supply coupled with a lack of new construction caused homes to sell quickly, especially those in the lower price range.
However, the national median home price of $255,600 is still too high for many buyers. NAR chief economist Lawrence Yun warns that unless the demand for affordable housing is met with new construction, too many potential home buyers will still be priced out of the market, unable to reap the financial benefits that home ownership can bring.
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