According to CNBC, there are no more low-priced homes to be found in the United States right now. The National Association of Realtors states that this past July saw the median American home selling for $258,300, which marked the highest July figure on record. Home prices are higher right now at every price point, but those high prices are being felt the most deeply at the low-priced end of the spectrum, the starter homes and small, inexpensive domiciles. Prices are up, and inventory is low.
There is some speculation that the housing market may finally have hit a wall. Prices have climbed so steadily and aggressively that there is no longer any room to go up. Experts say that there is tentative proof of that in the fact that sales fell slightly in July.
In examining sales data, the National Association of Realtors divides home into six “buckets” by price. CNBC shares that “sales in the range of $100,000 or below were down 14 percent compared with a year ago, while sales of million-dollar and higher homes jumped nearly 20 percent.”
?Another indicator? There’s the fact that, in 2013, when home prices were just starting to recover from the crash of the Great Recession, the share of homes sold above $500,000 was just 9 percent of all sales. Today, that particular “bucket” accounts for 14 percent of sales. The share of the lowest-priced houses, on the other hand, is half of what it was four years ago.
"On the lower end, there is virtually no property at a very low price level anymore," said Lawrence Yun, chief economist for the National Association of Realtors. "The same property has been moved up to a different price bucket just because the prices have been rising strongly, over 40 percent price appreciation in the past five years. We are not getting the transactions on the lower end because there is virtually no inventory on the lower end."
After the housing crisis, there was a trend of investors buying up low-end properties at bargain-basement prices, removing inventory from the market and putting it back at higher price points. Homebuilders are putting new homes in the market at a breakneck pace, but they are not selling low-cost homes. The combination has been detrimental for buyers looking for low-priced homes, such as first-time home buyers. If housing prices stop increasing, however, there is hope that the trend could reverse itself.
