High demand, low supply and low mortgage rates have driven up home prices to historic highs this summer. And for every $1,000 price increase, some 150,000 potential buyers are priced out of a home purchase — keeping them in the rental market.
“Homeownership is still dead in this country because the only people that are buying homes right now are people that have equity, great credit and a job,” multi-family housing investor Grant Cardone told Yahoo Finance.
Home prices usually drop in the fall, but median home prices hovered near summer highs at $350,000 last week, up 12.9% for the week ending October 3 compared to the same time last year, according to Realtor.com.
“If you keep pushing prices, you’re pricing people out. There’s no way around that,” said Ali Wolf, chief economist at Meyers Research, a California-based market data firm.
Meanwhile rent prices slid this summer, making apartments even more desirable and attainable for Americans during the pandemic. The national median rent price for a one-bedroom apartment was down 0.1% from last month to $1,231 according to Zumper, following a summer of stalled rent prices.