Today’s abnormally high housing prices and low inventory have created a market where buyers, sellers, and builders are all struggling to get ahead.
U.S. National Case-Shiller Index rose 6.4 percent year over year in April. Zillow Research reports that April marked the eighth consecutive month with a Case-Shiller housing price index above 6 percent. This type of sustained growth has not been seen since a 19-month period that began in 2012.
The increased demand for housing should be boosting builders’ bottom lines, but the rising costs of land, labor, and lumber are holding back their progress. As a result, homeowners looking to sell inevitably end up shopping for new properties in the same difficult market that is increasing the value of their current homes. And despite loosening loan standards and low mortgage rates, a lack of inventory may prevent first time buyers from entering the market at all.
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