A lack of housing inventory continues to stifle the housing market, making it difficult for potential homeowners to get on the property ladder.
And according to the latest quarterly report from the National Association of Realtors, the problem is not going to subside anytime soon.
“Without a significant ramp-up in new home construction and more homeowners listing their homes for sale, buyers are likely to see little relief in the form of slowing price growth in the months ahead,” said Lawrence Yun, NAR chief economist.
The NAR report cited that the median existing single-family home price increased in 81% of measured markets, with 145 out of 1791 metropolitan statistical areas (MSAs) showing gains based on closings in the fourth quarter compared with the fourth quarter of 2014.
There were slightly fewer rising markets in the fourth quarter compared to the third quarter, when price gains were recorded in 87% of metro areas.
Yun said faster price growth reawakened in the final months of 2015 despite the pace of sales slowing from earlier in the year.
“Even with slightly cooling demand, the unshakeable trend of inadequate supply in relation to the overall pool of prospective buyers inflicted upward pressure on home prices in several metro areas,” he said. “As a result, homeownership continues to be out of reach for a number of qualified buyers in the top job producing, but costliest, parts of the country – especially on the West Coast and parts of the South.”
Looking ahead, NAR President Tom Salomone, broker-owner of Real Estate II in Coral Springs, Florida, also noted that the main challenge for buyers so far in 2016 continues to be insufficient supply.
The report also stated that the national median existing single-family home price in the fourth quarter was $222,700, up 6.9% from the fourth quarter of 2014 ($208,400), while total existing-home sales, including single family and condo, declined 5.4% to a seasonally adjusted annual rate of 5.18 million in the fourth quarter, up from a 5.06 million pace during the fourth quarter of 2014.
A Capital Economics report in December posted similar concerns, saying this low housing inventory environment is not projected to go away any time soon.