The United States saw the median value of all homes increase by seven percent year-on-year in June to surpass US$200,000, reported CNBC citing a Zillow index.
Data from the National Association of Realtors, on the other hand, showed that the median price of a home hovered at more than US$200,000 for over a year. But unlike Zillow’s index, which factored all homes in the US, the measure only considered homes sold.
The sale price has increased not only because of the home’s inherent value but also because of the mix of residential units being sold.
To date, more expensive homes are being sold due to the severe lack of low-priced starter homes on sale. Higher volume of high-end homes shifts the median higher.
“When we train our models, we observe the sales that actually happen, and then we’re able to extrapolate that information to price every other home,” explained Zillow’s chief economist Svenja Gudell. “You take the characteristics of the house and use that to price the home.”
Zillow attributed the hike in home values to the lack of supply.
Notably, the inventory of homes for sale in June declined by more than 11 percent year-on-year, with steeper falls registered in big markets such as San Francisco (down 26 percent), Minneapolis-St. Paul (minus 30 percent), Seattle (down 24 percent) and Washington, D.C. (minus 20 percent).
“The national housing market remains red hot and shows no signs of slowing, even as some local markets like the Bay Area have noticeably cooled,” said Gudell.
“But even in areas where the housing market has slowed, home values are at or very near peak levels, selection is limited, demand is high and competition is fierce.”
This article was edited by Denise Djong.