Home prices

Purchases of new single-family homes increased 20.7% last month to a 1.02 million annualized pace after an upwardly revised 846,000 rate in the prior month, government data showed Friday.

“We know that home prices have been rising, mortgage rates inching higher, housing affordability becoming much more challenging, however I would say the softening sales activity is not due to demand going away,” Lawrence Yun, NAR’s chief economist.

The busiest season for home buying took off with a bang last month, as fierce competition among buyers drove prices up and sales soared to one of the highest levels in years.

At the metro level, Buffalo, N.Y., had the worst undervaluation for Black-owned homes at 86% followed by 72% in both Memphis, Tenn., and Indianapolis, Redfin found.

As listings were snagged at near-record speed, inventory hit yet another new low point, according to Remax.

Lumber futures have surged more than 60% to record highs this year, and analysts aren’t expecting any relief until late 2021.

Even as properties spent the least time ever on the market and the average sale-to-list home price ratio broke 100%, some indicators point to a slight reversal, which could head off “runaway home price speculation or a housing bubble,” Redfin chief economist Daryl Fairweather said.

That means depreciation is a risk that could creep back into some regions, potentially requiring lenders and government-related agencies to consider it when setting down payment requirements or managing loan workouts once forbearance ends.

The increase won’t hurt the incentive for the average home shopper, but it means those who were looking to “buy the dip” in prices amid the pandemic may have missed their chance.

As home values surged at record highs, the latest month-to-month movements indicate price growth could start returning to a pre-pandemic pace, according to the Federal Housing Finance Agency.