Buy a house during COVID? The housing market is a tale of two Americas and first-time buyers are struggling
May 06, 2021 2 mins, 14 secs

After contacting a real estate agent to look for starter homes between $150,000 and $220,000, Rodriguez says she found about 25 listings she was interested in?

Rodriguez’s experience reflects a national trend. The number of homes sold nationally in the $250,000 - $100,000 range fell by 11% in February from a year earlier, the National Association of Realtors told USA TODAY.

In the under $100,000 price range, the percentage of homes sold dropped by 26%.

But homes sold for over $1 million rose by 81%. .

In the current red-hot pandemic housing market, where prices have risen across the board, the ability to purchase homes seems proportional to the price range – the higher the price, the greater the sales.

In 2019, two homes sold for over $2 million.

This year, 17 homes in that price range had already sold or were in contract by April.

home prices rose in February at the fastest pace in nearly 15 years as strong demand for housing, low mortgage rates and a national housing shortage gathered momentum.

national home price index, released Tuesday, rose 12% from a year earlier, the biggest gain since 2006.

Prices of the country’s most affordable homes rose 16.5% year over year in the first.

Another reason for the low supply of affordable homes is the cumulative effect of builders not putting up enough homes since the last housing crisis — when many went bankrupt, says Lawrence Yun, the chief economist for the National Association of Realtors.

"Builders have focused on luxury homes because of higher margins," Yun says.

A number of factors have contributed to the lack of available housing, says Robert Dietz, the chief economist for the National Home Builders Association.

The cost of building a new single-family home in the affordable price range, for instance, is now more challenging because of regulatory requirements, such as town permits, but also higher lumber costs and exclusionary zoning laws that prohibit homes to be built on small lots.

Lumber prices have soared nearly 200% since mid-April 2020, increasing the average price of a new home by $24,000, he says.

“Lumber price spikes are not only sidelining buyers during a period of high demand, they are forcing builders to put projects on hold at a time when home inventories are already at a record low,” he says.

New listings of luxury homes grew 15.8% year over year in the.

This is the first spring that I honestly feel like there's just so much a demand, it's leaving us scrambling," she says.

“You're talking about a potential first-time home buyer, then you get into the property and you may have some surprises that you weren't prepared for,” she says


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