Home prices across the U.S. have grown 19.2% over the past 12 months with 11 metro areas now reporting median list prices of $500,000 or more, Fortune reports. Rising home prices posed a much smaller challenge to buyers at the start of the pandemic when mortgage rates were historically low and for sale properties were in greater supply. Now, the 30-year fixed-rate mortgage is up to 5%, and with only a meager supply of homes left on the market, buyers are feeling the sting.
While cities like San Francisco and Los Angeles joined the half-million dollar club long before the pandemic, other metros like Austin, San Diego, and Denver have seen home prices rise by over 20% in just the last 12 months. In Salt Lake City, prices are up by a staggering 30%.
“Prices will continue to grow in the short-term, which means the number of housing markets in that $500k or above range could grow over the next few months, since there are a number of markets in that $400k to $500k range,” Chris Heller, chief real estate officer at OJO Labs, told Fortune.
In some of the $500,000 cities where costs are highest, homebuyers may have to settle for prices that were unthinkable two years ago. In San Francisco, for instance, studio apartments selling for $540,000 are still so cramped that beds must be retracted into the ceiling during the day.
Advertisement
Related Stories
Affordability
NAHB Announces Plan to Ease the Housing Affordability Crisis
The National Association of Home Builders has outlined a 10-step plan that would increase the supply of single-family and multifamily for-sale and for-rent housing
Innovation
IKEA Model Home Aims to Ease the Trauma of Homelessness
Blending innovation with empathy and eco-conscious design, IKEA US unveils a pioneering model home in its Live Oak, Texas, store
Affordability
How Much Income Do First-Time Buyers Need to Afford the Average Home?
The median-priced home is unaffordable in 44 of the 50 largest U.S. metro areas