House Prices Continue Rise As Supply Dwindles [Infographic]

Since the housing boom, US house prices have kept on climbing, leaving many potential buyers at a loss of how they could afford a place of their own in the red hot market.

The median price of a house in the US increased from $323,000 at the start of the Covid-19 epidemic to $429,000 in the first quarter of 2022, according to numbers published by the St. Louis Fed. After adjusting for inflation, the average house in the U.S. is still $68,000 more expensive than before.

The current situation in the United States is a steep departure from the previous trend, as median house prices had remained more stable before and after the 2008 housing crash.

In the current climate, the number of buyers is not matching the supply, causing prices to go up. A market promising lucrative returns is also attracting more investors - they bought a record share of homes in the U.S. in 2021.

The median number of days that housing remains on sale in the U.S. is indicative of the market. When a run on houses occurs in the summer, sales tend to heat up. The short supply of homes did not have an effect on prices in the past.

Today's peak is yesterday's hot market.

The balance was upset in the years from 2020 onward. Median days on the market fell out of turn in the spring and then again in the fall. The usual summer dip expanded to a trough of low supply throughout most of the year. The listing frenzy that usually accompanies a new year did happen, but even at its peak, it wasn't keeping homes on the market much longer than in conditions that would have been considered a hot summer market in 2017:

In the first three months of the year, sales are expected to accelerate and the median listing time is expected to be less than a month this summer.

According to Marketwatch, the housing market was met with other, longer-term developments that were already putting a squeeze on housing supply in the U.S. The average time spent in a home increased to a high of 13 years in 2020 from just over 10 years in 2012 as people started to look for a change of scenery in the housing market.

It was.

The chart was created by Statista.