According to The Wall Street Journal, the S&P CoreLogic Case-Shiller National Home Price Index reported that home prices rose 18.6% in the past year ending in June. This figure is up from May’s annual rate reporting of 16.8%. However, the most striking statistic in the article was June’s rate was the highest price growth since the Index originated in 1987. According to Financial Times, this is also the third month in a row of record gains.
With low-interest rates and a low home inventory, the competition for homes is skyrocketing. This current lack of stock in the housing market plays a huge factor and directly correlates with the increased competition. For the past 12-18 months, the demand for homes has increased as buyers are looking to change locations and take advantage of low mortgage rates in other areas. At the same time, the cost of construction materials in 2020, like lumber, rose nearly 12%, according to NPR. As sawmills halted production early in the COVID-19 pandemic, fewer contractors could build homes, and with less inventory, homebuyers were forced into bidding wars on existing properties only.
Most recently, homes on the market have been receiving multiple offers, sometimes over 100 in just a few days, and many are selling for over the asking price— and sometimes with all-cash offers. As a result, many prospective homebuyers, especially first-time homebuyers, are finding it difficult to compete with the current market. If you are having trouble navigating the housing market, make sure to download our recent White Paper on “What Homebuyers Need to Know” in order to learn the tips you’ll need to land your dream home!