Home Prices Climb 16.2%: Median Home Sale Price Is Now $319,200
by Maurie Backman | Updated July 19, 2021 - First published on May 18, 2021
Homes have gotten more expensive, and it's putting buyers in a tough spot.
There's been a record-low level of housing inventory on the market over the past number of months. That's been a source of frustration for many buyers -- not just because of that limited selection, but because it's also driven the cost of buying a home upward in a very meaningful way.
The median existing single-family home price rose 16.2% in 2021's first quarter compared to the previous year, according to the National Association of Realtors. And now, on a national level, the median home value is $319,200. That represents a record high since 1989.
Not only that, but over the past year, all regions of the country saw a double-digit increase in year-over-year growth:
- The Northeast saw a 22.1% increase
- The West saw an 18% increase
- The South saw a 15% increase
- The Midwest saw a 14.4% increase
Low mortgage rates aren't helping
Despite the fact that mortgage rates are sitting at competitive levels, many buyers today are still unable to afford a home. Not only has the cost of existing homes risen substantially, but new construction homes are costing about $36,000 more on average due to an increase in lumber prices. The result? Many people who'd normally be well-positioned to buy a home are finding that there's nothing available within their price range.
What to do if you're struggling to buy
If you're having a hard time buying a home in today's market, you're not alone. So the question is -- is it a good time to buy a home?
For some, waiting might make the most sense. Normally, a lot of homes hit the market during the spring, but this year, that hasn't happened -- at least not so far. And it may be the case that sellers are still waiting to see how much things improve with regard to the pandemic before taking that leap and listing their homes. As such, inventory could stay low for quite some time, which means home prices are apt to stay high -- and you're apt to struggle.
If you pause your home search and pick it up again once inventory opens up, you may find that home prices start to come down. At the same time, mortgage rates are likely to stay competitive for the foreseeable future, so waiting a bit won't necessarily mean getting stuck with a higher rate.
And, if you delay your home search, you can use that time to put yourself in a stronger position to buy. Specifically, you can find ways to raise your credit score even higher in order to qualify for a lower mortgage interest rate. Or you can sock away more money for a larger down payment on a home so you have more buying options.
Right now, it's a very difficult time to buy a home. If you wait things out, you may find that you're able to snag a place of your own at a more affordable price point -- without losing out on finding an attractive mortgage.
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