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Economist Expresses Concern About Housing Affordability

The cost of homeownership has become so high that economists express concern.

The following are the latest housing market metrics from Redfin.com, which examines data from more than 400 metros nationwide. Because comparisons to 2020 are skewed due to pandemic-related lockdowns in spring 2020, the researchers compared their statistics to both 2020 and 2019.

  • The median home-sale price increased 20% year over year to $347,500, an all-time high. Note that this number is somewhat inflated due to a slight dip in median sale prices around this time in 2020, and due to fewer high-end homes being sold at this time a year ago, and more high-end homes being sold now. Asking prices reached an all-time high of $357,200.
  • Homes that sold during the period were on the market for a median of 20 days, down 16 days from the same period in 2020 and the shortest time on the market since at least 2012.
  • An all-time high 46% of homes sold for more than their list price, up 19 percentage points from the same period a year earlier.
  • The average sale-to-list price ratio, which measures how close homes are selling to their asking prices, increased 2.5 percentage points year over year to an all-time high of 101.2%, meaning the average home sold for 1.2% more than its asking price.
  • 58% of homes that went under contract had an accepted offer within the first two weeks on the market. This was a new all-time high since at least 2012.
  • 46% of homes that went under contract had an accepted offer within one week of hitting the market, an all-time high.
  • Pending home sales were up 23% from the same period in 2019.
  • New listings of homes for sale were down 12% from the same period in 2019. New listings were up 2% from the four-week period ending March 28. The small boost in the number of new listings fell far short of the 12% increase during the same period in 2019.
  • Active listings (the number of homes listed for sale at any point during the period) fell 48% from the same period in 2019 to a new all-time low.

Redfin's Chief Economist Daryl Fairweather expressed concern—not about a potential market crash, but about the general state of homeownership in this country.

I am concerned about how we as a society are going to reckon with just how expensive housing has become,” Fairweather said. “But I’m not worried about a housing crash because these sky-high prices are supported by the new reality of well-funded buyers who are often benefiting from newfound mobility via remote work. As the economy recovers, we have the opportunity to reimagine our country’s role in supporting a healthy housing market. For instance, we can subsidize construction of affordable homes or support first-time homebuyers in underserved communities. We have our work cut out for us when it comes to ensuring homeownership is attainable for middle-class Americans with good jobs and money saved up, not just for the wealthiest among us."

About Author: Christina Hughes Babb

Christina Hughes Babb is a reporter for DS News and MReport. A graduate of Southern Methodist University, she has been a reporter, editor, and publisher in the Dallas area for more than 15 years. During her 10 years at Advocate Media and Dallas Magazine, she published thousands of articles covering local politics, real estate, development, crime, the arts, entertainment, and human interest, among other topics. She has won two national Mayborn School of Journalism Ten Spurs awards for nonfiction, and has penned pieces for Texas Monthly, Salon.com, Dallas Observer, Edible, and the Dallas Morning News, among others. Contact Christina at christina.hughesbabb@thefivestar.com.

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