(ConservativeInsider.org) – When COVID-19 began, companies gave millions of Americans the opportunity to work from home. Over a year into the pandemic, many employees took this freedom to heart, moving from crowded cities to the suburbs. That caused home prices to skyrocket, especially near vacation destinations and major cities. There are more new homes on the market now than at any point in the last 13 years.
On Friday, September 24, the US Commerce Department released a report detailing the ever-changing housing market. In August, the supply of new homes peaked while their prices remained unchanged from previous months. Home sales increased slightly in the South and West, but they soared 26.1% in the Northeast. However, sales decreased 31.1% in the Midwest.
While these home sales are hot, the actual building of them may not be. Currently, builders face labor and material shortages, making it difficult to build all the homes Americans currently demand. Financial Juice shared more about the August jump on Twitter:
US NEW HOME SALES JUMP IN AUGUST DESPITE RECORD PRICES https://t.co/wvIHhzqhVz
— Breaking Market News (@FinancialJuice) September 24, 2021
The National Association of Realtors believes the demand for homes plateaued because the sale of previously-owned homes fell in August. In addition, the Federal Reserve announced it might reduce monthly bond purchases and increase interest rates before the end of the year, further cooling the market. This means home prices may begin to fall in the coming months if the supply stays at a record high and buyers are less excited about rising interest rates.
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