The housing market is so tight that house prices are 44% higher than before the pandemic
The median home price in the US is around $419,000, or 44% higher than January 2020, according to Redfin data.
The real estate group also said there are 39% fewer homes for sale compared to pre-pandemic.
Freddie Mac estimates that the American housing market is facing a shortage of approximately 3.8 million housing units.
A house in the US costs about 44% more today than it did before the pandemic.
The median home price now stands at $419,103, according to Redfin data, while in January 2020 it was $290,264.
Low inventory, high mortgage rates and a lack of contemporary homeowners willing to move to cheaper credit costs make for a historically unaffordable market.
In fact, a separate Redfin report on Thursday showed there are 39% fewer homes for sale now than before the pandemic, and Freddie Mac's latest estimates put the inventory shortage at about 3.8 million units.
Meanwhile, mortgage rates are still hovering near 7%, nearly double what they were two years ago, when low interest rates fueled a surge in home buying.
High rates have provided "golden handcuffs" to current homeowners, as it is more attractive and profitable to stay with cheaper credit costs than to move and take on more expensive mortgage interest.
And with the chairman of the Federal Reserve, Jerome Powell, signaling last week that further interest rate hikes are still on the agenda, mortgage rates may not drop much anytime soon.
Edward Seiler, the Mortgage Bankers Association's associate vice president of housing economics, told Insider in a recent interview that new home buyers are facing the least affordable market ever.
The group's purchase application payment index, which measures borrowers' affordability conditions, reached a peak in June.
"For new home buyers, this is the worst situation since the end of the Great Recession," Seiler said. "Current homeowners who are lucky enough to receive an interest rate of 2.75% in 2022 are in a great position, but for new home buyers looking to purchase a first home, or those looking to move to another home, this is a very daunting proposition."
Responses