“New-home construction is greatly needed; however, home construction fell in the first half of the year, [which] leads to continuing tight inventory conditions, especially at more affordable price point.Home prices are mildly reaccelerating as a result," commented Lawrence Yun, the chief economist at the National Association of REALTORS®.
In of the metropolitan area, the price of homes successively rise and across the biggest markets in the United States, up to 91% of them record an increase, giving us a median of $279,600.
As the earnings that citizens make start to fall behind, and start to chase after the prices, the ability to afford a house is steadily decreasing. In references to the NAR’s quarterly report, 1.93 million homes were on the quarter two market, which around the same time last year, was at a 4.4 months’ supply. And although the income of Q2 rose to $78,366, the housing market’s appreciation still exceeds it, thus restricting people in attempt to become homeowners.
Yun says, “This is evident in the very expensive markets, as home prices are either topping off or slightly falling; [the] housing unaffordability will hinder sales irrespective of the local job market condition.”
The vice-versa has happened in more costly markets, especially in San Jose (CA) (which in Q2 was down 5.3 percent), and San Francisco (CA) decreasing 1.9%. On the other hand, places like Burlington (VT), Columbia (MO), and Boise (ID), prices escalate and soar by the double digits.
“The exceptionally low mortgage rates will help with housing affordability over the short run, but if the low interest rates are due to weakening economic confidence, as reflected from a correction in the stock market, then the low rates will not help with job growth and will eventually hinder home-buying and home construction,” Yun adds. Accorging to Yun, people are able to afford house again if conditions for mortgage rates remain static.