A combination of factors including inflation has caused skyrocketing home prices. (Nicholas J Klein via Canva)
Home prices have been surging this decade.
According to an analysis by ResiClub of the Case-Shiller National Home Price Index, prices of homes have increased 47.1% just since the start of 2020.
The current housing boom has even outpaced the growth seen in the 1990s and 2010s which saw 30.1% and 44.7%.
Additionally, home prices this decade are reported to be on track to surpass the growth seen in the 2000s, along with possibly surpassing numbers seen in 2007 before the housing market collapse.
Housing experts say prices have climbed thanks to a shortage of available homes and many homeowners not wanting to sell after locking in historically low rates during the pandemic.
“Because the Fed kept rates too low for too long during the pandemic, listing inventory was essentially wiped off the map, keeping prices rising sharply despite the surge in mortgage rates,” appraiser Jonathan Miller told the New York Post. “Would-be home sellers that bought or refinanced at a 2.5% to 4% rate during the pandemic became reluctant to list their homes because, as new buyers, they would get a lot less for their money because of the much higher mortgage rates.”
According to The Associated Press, the average long-term U.S. mortgage rate moved above 7% just last month as homebuyers are facing higher costs to finance a home.
The National Association of Realtors reported that home prices continued to rise in the first quarter of 2024 with median prices rising 5% year over year to $389,400.
The Federal Reserve has talked about lowering rates this year, but CNN reports it still remains a mystery if the Fed will cut interest rates this year if at all.