US home prices hit record highs

Rising interest rates have cooled down the housing market in many parts of the world. Still, home prices in the United States rose to a record high in March, even as rapidly rising mortgage rates sent home sales plunging.

During the lockdown due to the pandemic, many people switched to working remotely and wanted a larger home. Along with that, record low interest rates made the housing market hot.

Homes often sell in less than a month after hitting the market, sometimes just days. That was the case in the past, and home sales in March fell to their lowest level in nearly two years.

Although homes sell for less, home prices are inversely proportional to sales. The average available home price in March rose 15% from a year earlier, to a record $375,300, according to the National Association of Realtors.

Analysts say one of the main reasons house prices have continued to rise is limited supply, with only 950,000 homes listed for sale in March, down 9.5% from March 2021.

Erin Sykes, Chief Economist, Nest Seekers International, said: “The strong demand to buy a home has begun to cool down, as supply is low, mortgage interest rates rise, pushing up prices. higher housing”.

Mortgage interest rates in the US are currently at 5% – back to the highest level since 2011. Experts expect home sales in 2022 will continue to fall 10% compared to last year.

“Just a month ago, many customers were still willing to buy a home, but now they have changed their mind,” said Ms. Erin Sykes.

Consumers have become less optimistic about the housing market. According to a survey by the New York Federal Reserve, only 43.3% of people who do not yet own a home believe they can afford a home in the future. Last year, the figure was 51.6%. This is the lowest level since the data began to be compiled in 2014.

According to VTV Digital