NEW YORK, March 31 (Xinhua) — U.S. home prices are rising at the fastest pace in 15 years, reflecting how fiercely buyers are competing for a limited supply of homes in “nearly every corner of the country,” reported The Wall Street Journal on Wednesday.
From small cities to large ones, prices have been steadily moving higher. Two closely-watched house-price indicators released on Tuesday posted double-digit national price growth, demonstrating the widespread strength of the market, according to the report.
“A number of forces have merged to fuel the red hot housing market, including mortgage rates dropping below 3 percent in July for the first time ever. Millions of millennials are aging into their prime home-buying years in their 30s. New-home construction has lagged behind demand and homeowners are holding on to their houses longer,” said the Journal.
“The coronavirus pandemic has turbocharged this demand. Many Americans sought homes with more space to work remotely during COVID-19, or felt freed to move farther from their offices,” it added.
At the same time, the pandemic worsened the already severe shortage of homes for sale. Low interest rates prompted more homeowners to refinance and stay put instead of moving. Others delayed their moves due to concern about virus exposure. Even as home builders have ramped up the pace of new construction in an effort to keep up with demand, they are limited by rising material costs and shortages of land and labor.
“It really can only be characterized as a super sellers’ market, not even just a sellers’ market,” Odeta Kushi, deputy chief economist at First American Financial Corp., was quoted as saying. “The supply-demand imbalance isn’t going away anytime soon.”
The housing boom has been a big benefit to these sellers and current homeowners across the country, while making it more difficult for first-time buyers and others with less income to enter the market, said the Journal.
There were 1.03 million homes for sale at the end of February, unchanged from the January level, which was the lowest in data going back to 1982, the National Association of Realtors said earlier this month.
The S&P CoreLogic Case-Shiller National Home Price Index, which measures average home prices in major metropolitan areas across the nation, rose by 11.2 percent in the year that ended in January, the highest annual rate of price growth since February 2006.
The Case-Shiller 20-city index rose by 11.1 percent from a year earlier, and price growth accelerated in all 20 cities. Phoenix had the fastest home-price growth in the country for the 20th straight month, at 15.8 percent, followed by Seattle at 14.3 percent. Enditem