The Average Home Price Hits $405K for the First Time

Home prices hit $405,000 for the first time in March, but data reveals there is some hope on the horizon for pandemic-era buyers.

With demand beginning to moderate as some home shoppers are priced out of the market and new construction at near 16-year highs, inventory is expected to hit positive territory year-over-year this summer, according to the Realtor.com Monthly Housing Trends report.

“Despite the $405,000 price tag, March data reveals we are starting to take some steps towards a more balanced market,” Chief Economist Danielle Hale said in prepared remarks. “Buyer demand is moderating in the face of high costs, and we’re beginning to see more homeowners take price cuts on their listings and overall inventory declines lessen in response.

Assuming all these factors and new construction hold steady, she said,  there could be inventory increases this summer.

This could have a knock on effect on the multifamily market, although likely not by any great degree. 

“Historically, during periods of higher interest rates and record housing prices, the apartment market becomes more attractive and the rent versus buy decision tips in favor of renting,” Allen Swaringen, president & CEO of JLL Income Property Trust, tells GlobeSt.com. 

Realtor.com Shows YoY Home Prices Up 13.5%

The median US listing price grew to an all-time high in March as prices rose 13.5% year-over-year, faster than is typical for this time of year, and about the same annual growth rate as last month.

But as Hale pointed out, the share of homes having their price reduced increased slightly from 5.8% last March to 6% this year. Still, it remains 9 percentage points below typical 2017 to 2019 levels.

Twenty-five of the largest 50 metros saw an increasing share of price reductions in March, compared to 18 in February.

Listing prices in the top 50 metros grew by an average of 9.1% in March over last year. Their price growth has been lower than other areas across the country, but much of this can still be attributed to new inventory bringing relatively smaller homes to the market this year. 

The median listing price per square foot in these large metros grew by 12.5% over the same period, not as high as, but close to, the national rate of 15.7%.

Miami (+37.0%), Las Vegas (+35.2%), and Tampa (+32.0%) posted the highest year-over-year median list price growth in March.

Austin homes showed the greatest growth in the share of homes with price reductions compared to last year (+2.9 percentage points), followed by Sacramento and Memphis (+2.3 percentage points).

Nationally, the inventory of homes actively for sale on a typical day in March decreased by 18.9% over last year, a smaller rate of decline compared to the 24.5% drop in February.