Residential home prices have been climbing rapidly in the last few months, but this trend and forecasts for the rest of the year may mean a decrease in affordability for some buyers.
According to the latest FNC Residential Price Index (RPI), home prices have been rising since March, and April’s gains marked the largest increase between March and April since 2005, when the housing bubble was at full throttle and home prices were approaching peak levels.
Recent statistics jointly released by the U.S. Census Bureau and the Department of Housing and Urban Development show that the median sales price of new homes sold last month was $282,800, and the average sales price was $337,000. The seasonally adjusted estimate of new houses for sale at the end of May was $206,000.
At those sales rates, the supply of home available for sale will hold out for about 4.5 months, the agencies said.
FNC’s RPI predicted moderate price accelerations in the coming months as interest rates fall and credit availability continues to loosen.
While this trend may seem like good news for sellers and agents, it’s not so great for potential future homebuyers, said David Blizter of Standard & Poor’s.
“Home prices are currently rising more quickly than either per capita personal income (3.1 percent) or wages (2.2 percent), narrowing the pool of future homebuyers,” Blitzer said in his company’s survey of U.S. home prices. “All of this suggests that some future moderation in home prices gains is likely.”
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