The American dream of home ownership has proven to be more elusive over the past year. For starters, home prices have skyrocketed from the latter half of 2020 until now. Add in a steep rise in mortgage interest rates, supply chain challenges for building materials, a labor shortage, and a persistently low inventory of homes for sale and you have a recipe for disaster. According to the National Association of Home Builders (NAHB), housing affordability posted three consecutive quarterly declines in 2022 and now stands at its lowest recorded level. In fact, the latest NAHB/Wells Fargo Housing Opportunity Index (HOI), found that just 38.1% of new and existing homes sold between the beginning of October and the end of December 2022 were affordable to families earning the median household income of $90,000.
Top 10 states with highest home prices
- #1. Hawaii: $636,400
- #2. District of Columbia: $618,100
- #3. California: $538,500
- #4. Massachusetts: $398,800
- #5. Colorado: $369,900
- #6. Washington: $366,800
- #7. New Jersey: $343,500
- #8. Oregon: $336,700
- #9. Maryland: $325,400
- #10. New York: $325,000
- *#23: Florida: $232,000*
Although the housing market overall has hit some considerable turbulence over the past year, there are some signs that better days may be ahead. For starters, mortgage rates have posted a modest drop since the beginning of the year. In addition, many expect that The Federal Reserve will end its string of rate hikes by the end of the first quarter of this year. If these expectations hold true, we should expect to see more buyers entering the housing market overall. Of course, we will still need to see more new home construction in order to address the chronic inventory constraints in the housing market.
Are you looking to buy or sell a property in the South Florida area? We can help! Contact Natasha at Live South Florida Realty, Inc. today! Also, be sure to download the free Florida Home Search app for your smartphone or tablet.