![](\"https:\/\/www.floridarealtors.org\/sites\/default\/files\/styles\/full_width_main_image\/public\/page\/image\/2019-08\/gettyimages-881503530.jpg?h=5ccadc17&itok=Ff0F_7y6\")
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In May, the year-to-year median home price was up almost 24%. The inventory shortage played a role, says NAR\u2019s Yun, but affordability is squeezing some buyers out too.<\/span><\/span><\/p>\n<\/div>\n WASHINGTON \u2013 Just how wild is the real estate market right now? You don\u2019t hear National Association of Realtors\u00ae (NAR) Chief Economist Lawrence Yun say this every day: \u201cWe\u2019ve never seen price appreciation of this magnitude.\u201d<\/span><\/span><\/p>\n It\u2019s a sobering message in NAR\u2019s latest home sales video, which covers the month of May, when the median home price rose nearly 24% year-over-year, from $283,500 in May 2020 to $350,300 in May 2021.<\/span><\/span><\/p>\n Higher prices have sidelined some house hunters waiting for more housing inventory. But buyer competition is starting to cool, which could help consumers\u2019 prospects.<\/span><\/span><\/p>\n Inventory is particularly scant in price points below $300,000, Yun says. And homes that are available in those price points are quickly being bid up. For example, Indianapolis house hunter Kelly Robinson said she budgeted for a $250,000 home, but properties in her target area were selling within days and sometimes fetched $100,000 above the asking price.<\/span><\/span><\/p>\n \u201cThere are so many aggressive shoppers out there, and I\u2019m not willing to compete with that,\u201d Robinson told CNN.<\/span><\/span><\/p>\n Some buyers are dropping out of the market \u2013 at least for now. Mortgage applications, a gauge of future homebuying activity, have decreased over recent weeks even as mortgage rates remain low. Home sales have dropped in recent months, too, mostly due to record-low inventory.<\/span><\/span><\/p>\n But housing analysts also point to buyers who are getting sticker shock from high home prices. \u201cClearly, sales are moving down partly due to the inventory shortage, but affordability is squeezing some buyers out of the market,\u201d Yun told CNN. \u201cHome buyers qualify for a mortgage based on their income, but with prices rising 20% or higher, it is simply pricing them out of the market.\u201d<\/span><\/span><\/p>\n Ultra-low mortgage rates under 3% are helping to offset some of the price hikes, and many buyers don\u2019t want to give up their shot at locking in some of the lowest borrowing costs on record.<\/span><\/span><\/p>\n Though bidding wars reportedly are decreasing, \u201cit\u2019s still a seller\u2019s market, no doubt,\u201d Yun says. But sellers should price their homes cautiously to remain competitive as sales decline and more inventory is added to the market over the coming months. New listings in June increased 5.5% year-over-year and were up 10.9% over the prior month, offering a sign that more listings are coming, according to realtor.com.<\/span><\/span><\/p>\n Yun predicts a \u201ccalmer\u201d market emerging for the remainder of the year. The market likely will remain tipped in sellers\u2019 favor, he says, but buyers likely will feel less pressure to rush their purchase decisions. That could be a welcome trend that encourages buyers who\u2019ve paused their home search to resume.<\/span><\/span><\/p>\n\nBuyers fatigued<\/span><\/span><\/h3>\n
Relief in sight?<\/span><\/span><\/h3>\n