The average American home price has risen by 16% since last August, although sales began to slow for the first time in fifteen months.
An analysis from real estate brokerage Redfin said that the median price of homes sold last month was $380,271 — marking the thirteenth consecutive month of double-digit year-over-year price gains.
However, the 16% growth rate is also the slowest since February; the month of August saw a 1% month-over-month dip in sale price, and there were 6% fewer homes sold year-over-year since last August.
“When it comes to home prices in this market, what goes up stays up,” explained Redfin chief economist Daryl Fairweather. “As workers change jobs en masse and enhanced unemployment benefits come to an end, we could see even more households relocate for affordability in the coming months.”
Fairweather noted that cities in the Sun Belt — such as Austin and Phoenix — are seeing particularly high price increases. Respectively, the two markets have seen 35.7% and 25.2% more expensive homes since last year. Salt Lake City, Dallas, Fort Worth, Nashville, and Miami saw price hikes of 24.3%, 17.6, 20.5%, 19.4%, and 16.9%.
Austin, Virginia Beach, and Columbus had the highest year-over-year increases in available homes. Indianapolis had the most heated market, with half of all homes selling in a mere five days after listing.
Since the COVID-19 pandemic, lockdowns, and the associated recession, the American housing market has experienced a high degree of competition. As Zillow explained in a report released earlier this year, “the combination of tight supply and high demand is doing more than just pushing home values up at a record pace — it is also helping push the amount of time homes spend on the market before selling to record lows.”
Another report from the Associated Builders and Contractors showed that shortages in home supply are compounded by a distorted labor market for construction employees; the group predicted that “a higher growth rate scenario could boost the number of additional construction workers needed in 2021 to nearly 1 million.”
Indeed, leaders of construction businesses were dogged by the worker shortage that continues to impact the entire American economy. Matthew Messer, the owner of New York Solar Maintenance in Long Island, New York, told CNN Business that he was forced to work alongside his construction staff due to the lack of available labor.
“The phone is ringing off the hook. I am expanding as quickly as I can, but right now that’s governed by the amount of skilled technicians I can bring on,” Messer said to the outlet. “I was offering $18-$22 an hour and I got no applications. I increased it to $23 and I got none. I increased it to $25 and they’re starting to trickle in right now. It was a dramatic increase, but in order to grow the business, I need technicians.”
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