The housing crunch has inspired hordes of eager buyers to squeeze into open houses across the country, submit offers on properties they’ve never seen, and engage in knock-down, drag-out bidding wars. And yet monthly sales of existing homes actually dropped in most of the country, due to the sheer lack of such homes on the market (they don’t call it an inventory shortage for nothing, folks). Except in one region, that is.
In the Midwest, sales rose 3.1% from May to June, according to the seasonally adjusted numbers in a recent National Association of Realtors® report. This helped boost prices 5.6% month-over-month, to hit $213,000. Despite the bump, the Midwest still has the most affordable homes in the country.
Still, existing homes remain cheaper than newly built ones—by about 31%. The median price of a new abode was $345,800 in May, according to the most recent data available from the U.S. Census Bureau and U.S. Department of Housing and Urban Development.
“Millennials, first-time buyers, and people of moderate income are having difficulty finding any home that they can [afford to] buy,” says Joseph Kirchner, senior economist of realtor.com. “Sales of lowest-priced homes have been falling for the last few months. This is where the shortage of homes is the greatest.”
Indeed, the annual number of homes costing less than $100,000 (and within the budget of many first-time buyers) fell 9.3% in June, according to the NAR report. They edged up 0.1% for residences in the $100,000 to $250,000 range.
Across the country, sales prices of existing homes were highest in the West, at $378,100. Sorry, cash-strapped buyers. Prices were up 7.4% annually in the region, home to super-duper, expensive cities like San Francisco, Silicon Valley’s San Jose, and Seattle. Monthly sales dipped 0.8% in the West, but were up 2.5% annually.
Prices were also high in the Northeast, at a median $296,300, up 4.1% annually. Sales fell 2.6% from May to June, but rose 1.3% year-over-year.
Homes in the South went for a median $231,300, a 6.2% annual rise. Sales were down 4.7% from May, but were flat annually.
And although sales rose in the Midwest from May to June, they were the same year-over-year.
“The demand for buying a home is as strong as it has been since before the Great Recession,” says Lawrence Yun, NAR’s chief economist. “Listings in the affordable price range continue to be scooped up rapidly, but the severe housing shortages inflicting many markets are keeping a large segment of would-be buyers on the sidelines.”
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