This is how hot the US real estate market is now


How much more is your home worth now than a year ago? Why is the real estate market warmed up in 2021? In that Motley Fool Live clip, Millionacres editor Deirdre Wullard and senior real estate analyst Matt Frankel, CFP, discuss numbers and other aspects of the current real estate market to consider.

Deirdre Wullard: Figures that the price of Case-Shiller has risen by 14.6%, this is the highest price in 30 years, indeed in more than 30 years. The most interesting thing that I keep finding out is that Phoenix is ​​the most popular market and you think Phoenix is ​​like a real market right now because it’s so warm there, but people keep moving.

Matt Frankel: Warm places seem to be the most popular markets right now, just like Las Vegas. In fact, I’ve heard larger statistics. I read on the website of the National Association of Realtors, the average selling price of existing homes in May rose 23.6%. This is impressive and makes me want to sell the house.

Woollard: I think this is one of the things we’re dealing with right now, and Jason Hall and I talked about it last week. On the one hand, this is such good news for homeowners because they have their own capital, but the affordability issue is so serious that it’s hard to cheer on it when you know it’s really stopping so many people from buying.

Frankel: This is definitely true. We are starting to see the stocks increase again, I would not say that the level is normal. But the reason I ended up on the National Association of Realtors website was because I wanted to see the pace of home sales. In May, it was the highest since the pandemic, indicating a recovery in stocks. These are not just crazy betting wars that push prices up and some stock returns to the market.

Woollard: Yes, but it’s 2.5 months. If the normal market is six months, I feel like it was about four months for a long time, 4 1/2 months, which is difficult but doable, but yes, it has grown a little, but 2.5 months is still very, very low.

Frankel: When it comes to affordability, it seems like a trade-off when it comes to mortgages. You mentioned, I mean, it was 13% or so, that you just mentioned the year-on-year increase in house prices.

Woollard: 14.6% for Case-Shiller.

Frankel: The difference in mortgage repayment on a mortgage with an interest rate of 3% versus 4% is about 12% of the difference in terms of cost savings. Even though home prices are much higher, the homeowner’s actual monthly out-of-pocket expenses are not much higher, it is the down payment issue that really affects the affordability issue. Because 20% of $ 500,000 is much more than 20% of $ 400,000.

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