WASHINGTON–New data show that home prices nationally have gone up about 30% since the beginning of the pandemic, according to a new report from the National Association of Realtors that it said represents a first-of-its-kind analysis.
The NAR said that since the end of 2019 a typical home costs about $80,000 more than pre-pandemic. During the same time, inventory fell to a record low of about one-million properties available for sale at the end of December last year.
"With limited supply, the issue of affordability looms even bigger," said Nadia Evangelou, NAR's senior economist, director of forecasting and lead author of the report. "Wages may have increased, but not anywhere near the pace of the home prices."
The NAR report examines how the combination of record high home prices and record low inventory has affected people's ability to afford a home.
“Rising prices are already limiting the pool of homes within reach for buyers, the research found, but buyers' options are even fewer since there are significantly less homes available for sale,” said CNN Business in its analysis of the NAR report. “This has made it increasingly difficult for buyers, particularly Black Americans, to achieve homeownership.”
Additional Findings
Among other findings in the report, which is based on data from Realtor.com that included an inventory of about 500,000 listings:
- Among the homebuyers hit hardest by high prices and low inventory are those earning $50,000 to $75,000. The report found that these buyers have a maximum affordable home price of $325,110, and the share of listings that they can afford has dropped by 6% since before the pandemic. The researchers also found there are 63% fewer listings that these prospective buyers can afford than there were in 2019.
- Also hurt are homebuyers earning between $75,000 and $100,000. This group, the report found, can afford a maximum home price of $433,480. Researchers determined these prices by making some assumptions, including that the buyer is not spending more than 30% of their income on housing and that the purchase is financed with a 30-year fixed-rate mortgage.
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