The number of homes in the US on the market was still 37.5% less in June, 2021 than in June 2020, which has led to skyrocketing home prices in many markets. Clearly, there is more demand than supply so that the national median sale price actually rose from $320,000 in April to $336,000 in June. The good news however, is that inventory across the country rose by 1.9%, which means at least there was a few more homes for sale than months before.
This is not much of an uptick unless it becomes a trend. The fact is that the country is short 5 million housing units, which in particular is a killer for first time home buyers that tend to drive markets. In fact, first time home buyers have been driven out of the market because they just could not compete with either all cash buyers, or buyers able to put 20% or more down to purchase a home. And, of course, since many homes have been selling in bidding wars above list price, first time home buyers with low down payments just could not compete. So, they have been forced to continue paying rising rents until the markets cool down.
I suspect it will take two or three years for demand and supply to equalize. It may not be a buyer's market for a while, which would take a downturn caused by much higher mortgage interest rates, but at least there may be more inventory to choose from, which should moderate prices. The last year has been one of the most interesting in decades in the real estate market. To say it has been a seller's market is an understatement.
