Home Prices Increasing At A Rate Not Seen In Decades
MIAMI (CBSMiami) – Home prices are increasing at a rate not seen in decades.
"We're in this really crazy time in housing right now," says Zillow economist Nicole Bachaud. She says there is a shortage of available homes.
Realtor Monique Edwards says a simple home showing in Raleigh, North Carolina, drew a swarm of potential buyers.
"People were frantic. They just wanted to make sure there was no holes in the walls. Ran upstairs, and they said, 'OK, I want to put an offer,'" she says.
According to Zillow, the number of listings dropped 42.4% from January 2020 to January 2022. Because of that, prices are soaring. Home values increased 19.9% from January 2021 to January 2022.
"There's so many people trying to buy houses right now and there's just not enough supply to satisfy them," says Bachaud.
Bachaud says home construction slowed during 2008's Great Recession. Builders now want to ramp up, but the pandemic has created shortages of materials and workers.
"That's why we're going to continue to see prices rising for the foreseeable future," Bachaud says.
Experts believe rising mortgage interest rates could slow demand slightly.
"It's about 30% more expensive to pay for a mortgage on today's home than it was a year ago. You know, that's hundreds of dollars a month, in some cases, and so, you know, people who are right on the edge of, you know, being able to afford something might be pushed out of the market for the time being," says Bachaud.
But Zillow predicts home values will continue to climb about 16% this year.
According to Redfin.com, 8% of U.S. homes are valued at one million dollars or more. That's up from just 4.8% two years ago.