Home prices are picking up speed as inventory continues to dwindle and mortgage rates remain low. According to CNBC, home prices saw a larger jump year-over-year in July compared to June. July experienced a 5.5% home price increase compared to 2019 numbers and June home prices grew by 4.3% year over year. The luxury market is not seeing the same acceleration in price though due to lower demand. One economist tells CNBC first-time buyers and investors are seeking lower-priced homes. But the number of homes listed under $100,000 was down by 32% annually in July.
The inventory of homes priced under $100,000 was down 32% annually in July, according to the National Association of Realtors. Compare that with the supply of homes priced at $500,000 to $750,000, which was down just 9%.
Of course, all real estate is local, and especially so now as the pandemic is hitting some markets harder than others. Homebuying is gaining significant strength in more affordable suburban and rural areas as buyers seek more space for the new work-and-school-at-home economy. CoreLogic cites Nassau and Suffolk counties on Long Island, New York, where home prices jumped 4.3% annually in July, likely due in part to urban flight from New York City. Prices in the New York metropolitan area rose just 0.4%.
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