How much more is your home worth now than a year ago? Why has the real estate market heated up in 2021? In this Motley Fool Live clip, Millionacres editor Deidre Woollard and senior real estate analyst Matt Frankel, CFP, discuss the numbers and other things to consider about the current real estate market.
10 stocks we like better than Walmart
When our award-winning analyst team has an investing tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.*
They just revealed what they believe are the ten best stocks for investors to buy right now... and Walmart wasn't one of them! That's right -- they think these 10 stocks are even better buys.
Stock Advisor returns as of 6/15/21
Deidre Woollard: Numbers that Case-Shiller was up 14.6%, highest price in 30 years, 30-plus years, really. The most interesting thing I keep finding about this is that Phoenix is the hottest market and you think Phoenix is right now though, like actual this market because it's so warm there, but people keep moving.
Matt Frankel: The warm places seem to be the hottest markets right now, like Las Vegas is particularly hot market as well. I actually heard a bigger statistic. I was reading on the National Association of Realtors' website, the median sales price of existing homes is up 23.6% in May. That's pretty impressive and makes me want to sell my house.
Woollard: This is I think one of the things that we're dealing with right now, and Jason Hall and I were talking about this last week. It's like, on the one hand, it's such good news for homeowners because they have equity, but the affordability problem is just so massive that it's hard to cheer it on when you know it really prevent so many people from buying.
Frankel: That's definitely true. We're starting to see inventories tick back up, I wouldn't say normal levels. But the reason I was on the National Association of Realtors site was because I wanted to see the pace of home sales. In May, it was the highest it's been since the pandemic, which indicates that inventories are coming back. It's not just crazy bidding wars that are getting the prices up and some inventory coming back onto the market.
Woollard: Yeah, but it's 2.5 months. If a normal market is six months, I feel like for a long time it was around four months, 4 1/2 months, which is like tough but doable, but yeah, it's gone up a little bit, but 2.5 months still very, very low.
Frankel: On the affordability thing, it's like a give and take when it comes with mortgages as well. You mentioned, I want to say it was the 13% or so that you just mentioned the home prices up year-over-year.
Woollard: 14.6% for Case-Shiller.
Frankel: The difference in your mortgage payment with a 3% interest rate mortgage versus a 4% is about a 12% difference in terms of cost savings. Even though home prices are lot higher, the actual out-of-pocket monthly costs to a homeowner isn't that much more, it's the down payment thing that really affects the affordability issue. Because 20% of $500,000 is a lot more than 20% of $400,000.