According to the National Association of Realtors, the median price of an existing home stood at around $363,300 in June – up 23.4% year over year. Fannie Mae’s June Home Purchase Sentiment Index showed that 77% of consumers believed it was a good time to sell, while 64% said it was a bad time to buy.
“Those attitudes are likely to continue for the rest of 2021 because the supply of homes for sale won’t come close to meeting the demand,” Lewis added. “As for home sellers, you might think, ‘Well, good for you. I guess you can move on really easily.’ But most home sellers are buyers, too, as they upgrade, downsize, or relocate. Selling is sweet in this market, but buying is sour.”
Although construction has picked up in the past few months, there are still not enough available houses to meet the population’s needs. Freddie Mac chief economist Sam Khater estimates that the housing market was short of 3.8 million units at the end of 2020.
Lewis pointed to the shortages and price surge of lumber and other materials as other limiting factors, as well as scarcity in computer chips that control appliances. An analysis by the National Association of Home Builders (NAHB) revealed that skyrocketing lumber prices added about $35,875 to the market value of a single-family home and nearly $13,000 to the average price of a multifamily home.