As home prices continue on an upward track, housing inventory only stretches thinner, and as the economy remains weak, this may not be the ideal time for first-time buyers. Realtor.com says the current market has pushed many first-time buyers out and back into rentals, yet it is clear many Americans are still buying homes despite the current economic downturn and high unemployment rates. Realtor.com asks the question: Has homeownership turned into a tale of the haves and the have-nots? Is the American dream of homeownership still a reality for the average citizen? If the median household income was at $63,179 in 2018 and the median home price was $298,670 the same year, (nearly five times more than median income) it may appear as though homeownership is not for the average American. Read more to see what else Realtor.com is saying about the current market.
Nationally, median home list prices shot up 10.8% year over year in the week ending Sept. 5, according to the latest realtor.com® data. The significant increases were due to record-low mortgage interest rates allowing buyers to stretch further on what they can pay for a home as well as a historic shortage of homes for sale leading to offers over asking price and bidding wars. The number of properties on the market was down 39% compared with a year ago.
The median household income was just $63,179 in 2018, according to the latest U.S. Census data. Yet the median home list price was $298,670 in that year—nearly five times more. And it keeps going up and up. The median home price has risen to $350,000 in August of this year, according to realtor.com data. That's a 17% increase in just two years—way higher than the standard 2% to 3% inflation.
"The American dream is less attainable today than it was in the past," says Ken Chilton, a public administration professor at Tennessee State University in Nashville. "House prices have appreciated faster than wages for a long time. And now that people’s income has been cut or eliminated, that just exacerbates the problem."