Americans Look For A Silver Lining As Housing Prices Continue To Increase

If you’re in the market for a new home, you’re probably concerned about high prices. But as with almost any economic trend, there could be some pros mixed in with the cons.

Bigger costs, smaller crowds

Let’s start by taking stock of the harsh reality surrounding the housing market. The latest Home Buyer Cost Index reveals just how much the price of an average home has increased over the past year.

Here are a few of the most significant statistics:

• Between May 2023 and May 2024, prices increased in 70% of U.S. counties.
• The median amount of that increase was $22,000.
• A typical home as of last month came with a $444,000 list price.

Faced with a median price that’s more than $75,000 higher than the typical U.S. household can afford, it’s no wonder many would-be buyers are deciding to call off their search. But in that objectively bad news is where we might find a glimmer of hope.

With fewer people shopping for a house, the market seems to be opening up for those who are still in the hunt.

Deciding if the time is right

A new report compiled by NBC News found that the homebuying difficulty index fell last month even as prices got higher, which is a direct reflection on the reduced competition in the marketplace. But while the law of supply and demand might suggest that fewer buyers will translate into lower prices, that doesn’t seem to be panning out just yet.

National Association of Realtors chief economist Lawrence Yun said it could be around the corner, though, concluding: “Inventory has certainly increased [nationwide], but sales have yet to really get going. So if inventory lingers for longer, that’s when we’ll really start to see price reductions.”

Chris Agee June 24th, 2024

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