The median existing-home sales price was $407,600 in April, and $433,500 for a new house, compared to $304,144 four years ago, marking a 42% increase, largely due to pandemic demand.
The main culprit for surging home prices is the lack of existing home inventory, which constrained sales and led to a 57% reduction in home sales due to rock-bottom mortgage rates.
Economists point to a 'lock-in effect' caused by low mortgage rates, hindering existing homeowners from selling and contributing to the inventory shortage, with 1.33 million potential sales being prevented.
Despite challenges, housing inventory is expected to improve due to various factors like the 3 D's (death, divorce, disease), families needing more space, downsizing, job relocations, and increased efforts by builders.
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