Case-Shiller: U.S. Home Prices Continue to Rise for the Sixth Consecutive Month – The Great Housing Affordability Crisis Continues
The latest report by Case-Shiller showing the sixth consecutive month of rising U.S. home prices highlights the ongoing crisis of housing affordability. For homeowners, this may be a reason for a celebratory champagne pop. But for those struggling to enter the housing market – it’s a reason for frustration and disappointment.
Overview of the Case-Shiller Report
Case-Shiller utilizes a mathematical model, analyzing housing values by comparing similar properties to determine accurate average home prices. According to Case-Shiller’s latest report, prices for single-family homes have risen annually by 19.1%, representing the largest gain since 1987. This broad momentum in the housing sector has some economists predicting such growth to last through 2022.
Factors Driving the Rise in Home Prices
Many factors contribute to the rise of home prices in the U.S., including low housing inventory, high buyer demand, and easily obtainable mortgage interest rates. Demographic shifts and migration patterns are also at play since more city-dwellers seek suburban homes due to the COVID-19 pandemic. Government policies, including low Federal Reserve lending rates and President Biden’s $15,000 first-time homebuyer incentive, have also been shown to contribute to the recently observed upswing in home prices.
Implications for Homebuyers and Sellers
The rising home prices, although great for homeowners looking to sell their property, pose a problem for aspiring buyers seeking affordable homes. High prices and bidding wars make it difficult for prospective homeowners to get their first foot on the property ladder. One solution for buyers is to research and explore variable lending programs such as