What goes up – is still going up.
Realtor.com®’s monthly housing trends report had a big headliner: the U.S. median home list price in March peaked at $300,000 for the first time ever. This also marks a price increase of 7% year over year.
Why is this happening, you might ask?
Many believe it’s due to the rise in inventory in the high-end market. Homes priced above $750,000 have continued to increase – up 11% year over year. This doesn’t help first-time homebuyers who are looking to enter the market.
Most first-time homebuyers are looking for homes priced at $200,000 or below (these are called entry-level homes) but this niche in the market has had a 9% decrease year over year, obviously making them harder to find and harder for people trying to purchase their first home.
Danielle Hale, realtor.com®’s chief economist, explains: “Heading into the spring, U.S. prices are expected to continue to rise and inventory is expected to continue to increase, but at a slower pace than we’ve seen in the last few months as fewer sellers want to contend with this year’s more challenging conditions.”
With 86% of first-time homebuyers being 28 years or younger, millennials are having to work hard at finding ways to purchase.
While it does seem promising that inventory is increasing – however slowly that might be – experts will have to keep an eye on the real estate market and hope entry-level homes begin increasing year over year.