Home prices reached record highs in April as the housing market continued to boom, with home prices in areas around cities climbing at the fastest rate on record.
Average home prices in metropolitan areas, measured by the S&P CoreLogic Case-Shiller National Home Price Index, rose 14.6% between April 2020 and April 2021, according to an analysis released Tuesday. The increase is the highest annual rate of housing price growth the index has measured, according to The Wall Street Journal.
House prices are at their highest point ever as the housing market continues to boom, leaving some buyers struggling to afford a home, according to a real estate group.
The median existing-home price topped $350,000 for the first time in May, a 23.6% increase from a year earlier, according to a Tuesday report from the National Association of Realtors (NAR). While existing-home sales fell 0.9% from April to May, prices continued to increase as supply struggled to meet demand.
A combination of home buyers leaving cities, low interest rates, and constrained housing supply has caused prices to skyrocket, according to a report from Redfin. While the market has benefited sellers, some buyers have been priced out, the The Wall Street Journal reported.
Lumber futures plunged further this week, seeing a price drop that hit 20% in a sign that the lumber market may finally reverse course from its dizzying price spike that occurred over the last few months.
The reversal was likely driven in part by a drop in homebuilding, which was down nearly 10% last month; general home repair also saw a similar decline.
Lumber manufacturers over the past several months have also been producing record levels of supply in response to the price surge.
Housing inventory in the U.S. remains significantly low, driving a white-hot market in which buyers continue to resort to aggressive buying tactics such as inspection-free transfers and hugely inflated offering prices.
Data from the Federal Reserve show housing inventory began declining last summer before dropping sharply in October. From over 1,550,000 units in May of last year, the Fed says stock has dropped to just above 1,000,000.