US Home Prices Continue to Rise

November 20, 2024 TruthUSA

Market demand and prices are being driven up by low inventories and expectations of lower mortgage rates. This trend is highlighted in the real estate market in the United States, with home prices continuing to rise and potential further increases on the horizon as more buyers enter the market.

According to a report from real estate brokerage Redfin, home prices increased by 0.5 percent month over month in October. This marks a year-long trend of monthly price appreciation, with a 5.9 percent yearly increase in October. The limited number of properties available due to high mortgage rates has contributed to this price growth.

Looking ahead, Redfin anticipates that the housing market’s scarcity of properties could continue to drive prices higher.

In their analysis of 50 metropolitan areas, Redfin found that 42 saw month-over-month home price gains. Among these, San Francisco had the largest price appreciation at 2.26 percent, followed by Detroit, Nassau County, New York, and Boston, each with over 1 percent price appreciation.

Redfin’s senior economist, Sheharyar Bokhari, noted that the recent election has spurred an increase in homebuyer demand, potentially leading to heightened competition and further price increases unless more properties are listed.

A recent forecast by Zillow predicts a modest rise in home values of 2.6 percent this year and a projected 2.8 percent increase over the next 12 months. Factors such as low inventory and expectations of lower mortgage rates are contributing to this trend.

In contrast, Zillow points out that elevated mortgage rates and a slight increase in for-sale inventory could limit the growth of home prices.

Future Market

Redfin emphasized the need for more housing from President-elect Donald Trump, suggesting that regulations limiting construction should be revisited to make housing more affordable. Trump’s proposed actions to reduce inflation and eliminate unnecessary regulations could impact the trajectory of home prices and mortgage rates in the coming months.

Chief economist Lawrence Yun of the National Association of Realtors anticipates a slight boost in home sales following the presidential election. Signs of market improvement include a 3 percent annual increase in pending sales in September and growing inventory for existing and new homes.

Yun expects the median home price to rise by 2 percent in 2025, reaching $410,700. He also emphasizes the importance of increasing housing supply to prevent unsustainable price increases and ensure housing affordability for all.

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