As record-breaking prices rise, the housing market rally has been largely in the favor of wealthy homeowners.Year-over-year, sales of homes worth more than $1 million have increased by 245% Homes under $100,000 are down 11%This gap is only one of many K-shaped trends in uneven economic recovery.Subscribe to the 10 Things in Politics Newsletter for the latest news in politics and the economy. Loading something is currently loading. Click Sign up to receive marketing emails and other offers from Insider.The boom in the housing market, like many other aspects of the US recovery has been anything but normal.As a result, the market rallies began as a broad upswing. After the pandemic hit, home sales fell. However, a surge in demand and low mortgage rates prompted a national buying frenzy. As the boom surged, however, a K-shaped divide emerged. Which type of homes were quickly gaining in value and which were being abandoned.The "K-shaped recovery" is a term that describes the uneven aspects of the US's economic recovery. Lockdowns were generally more beneficial for wealthy Americans who switched to remote work and relied on savings. After beingdisproportionately affected by the COVID-19 economic recession, low-income Americans and minorities have a longer recovery time.The gap in housing sales is evident from the existing data released Tuesday. According to the National Association of Realtors, sales of homes worth less than $1 million have increased 245% over the past year. This is a greater jump than any other price range.However, the sales of homes less than $100,000 fell 11% since May 2020. Meanwhile, sales of homes between $100,000 and $250,000 dropped 1.7% throughout the year.These disparities indicate growing inequity within the US housing market. About 30% of May's sales were for homes worth less than $250,000, while 6.3% of those with a higher value were sold.In spring, the sales gap widened further. Due to a severe inventory shortage, home-price inflation soared at an even faster rate than it was during the mid-2000s bubble. Demand outstripping supply drove sales of the most expensive homes to soar, while sales of homes less than $100,000 fell.Together, the most wealthy homeowners in the country benefited the most from the price rise, while those who live in the least-expensive homes of the country have been largely left behind by the market boom.The trend is expected to continue into the summer, according to other data. In recent months, housing starts have been slowing down due to high lumber costs and a shortage of lots. The May sales decline in new home sales is a sign that contractors are still struggling to meet the huge demand for new supply.The market for new homes is more favorable to wealthy buyers than it was a year ago. According to the Census Bureau, most new homes are now between $300,000-$399,000. In May 2020, the majority were priced between $200,000 & $299,000.According to Ali Wolf, chief economist at Zonda's housing platform, the shift is not due to more expensive units entering the market. Wolf tweeted Wednesday that this was not the case. The price increase over the past year is the reason for the shift. Wolf stated that 95% of contractors increased their prices between April and May. Most of these increases averaged $10,000 or greater.According to NAR's estimates, it will take a lot of effort to address the problem. According to NAR's estimates, the US has a shortage of 6.8 million homes due to decades of underbuilding and home losses.NAR stated that builders will have to increase construction to 2,000,000 units per year if they want to fill the gap over the next 10 years. This would represent a significant increase from the 1.57 million homes built per year in May.Lawrence Yun, chief economist of NAR, stated in the report that there is a strong desire to own a home. However, the lack supply is keeping too many Americans from realizing this dream.
