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Tight Supply, High Demand Keep Home Prices Out Of Reach: Report

David Krechevsky
Aug 05, 2021
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HouseCanary's Latest Study Shows Single-Family Home Prices Up 21.3% YOY

KEY TAKEAWAYS
  • Report says nationwide supply shortage continues to drive prices higher.
  • The number of affordable homes listed below $200K continues to fall.

The tight supply of single-family homes on the market nationwide continued to drive prices higher, putting homeownership out of reach for some potential buyers, according to a new report.

The latest Market Pulse report by HouseCanary Inc., a national brokerage firm, analyzes listing-derived metrics and compares data between July 2020 and July 2021. The latest report, released today, found that the number of properties listed below $200,000 is low due to strong demand and limited inventory.

“As we’ve observed throughout the pandemic, properties below $200,000 are significantly underperforming as the confluence of strong demand and limited inventory has led to record-high home prices — even in areas that were once considered affordable,” said Jeremy Sicklick, co-founder and CEO of HouseCanary. “Although mortgage rates dipped slightly in July, many prospective homebuyers appeared unable to take advantage due to expensive valuations and limited supply.”

Sicklick added, however, that while the “nationwide inventory shortage continues to dominate the current market, … the narrowing chasm between net new listings and the number of listings under contract is a positive sign that the supply-demand imbalance is slowly diminishing.”

According to the report, as of July 2021 there have been 3.07 million net new listings on the market since July 2020, a 12.3% increase over the same period a year earlier. Just 19% of those listings, however, were priced at $200,000 or below, while 41.7% were listed between $200,000 and $400,000; 20% were listed between $400,000 and $600,000, 12.8% were listed between $600,000 and $1 million, and 6.5% were listed above $1 million.

In addition, the percent change in new listings broken down by home price over the past 52 weeks as compared with the same period in 2019, saw the number of homes listed at $200,000 or less decrease by 17.4%, while the number of homes listed between $600,000 and $1 million increased 64%, and the number of homes listed above $1 million increased nearly 78%.

The report said that in July 2021, there were 319,418 net new listings on the market, representing a 3.8% decrease year-over-year. Over the last 52 weeks, 3.3 million properties have gone into contract, a 7.4% increase vs. the same period in 2019. 

For the week ending July 30, 2021, the median price of all single-family listings in the U.S. was $386,681, a 10.4% increase year-over-year. For the week ending July 30, 2021, the median closed price of single-family listings in the U.S. was $394,541, a 21.3% increase year-over-year.

You can read the Market Pulse here.

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