The U.S. and others see home prices continue to skyrocket!

As it relates to housing, there are a number of concerns in the U.S. at the moment:

1.  8 million households are at risk of foreclosure or eviction.
2. According to the PEW Trust, there were more than 7 million renters who were behind on rent in May.
3.  Studies have found there is a connection to neighborhoods with low vaccination rates and high levels of eviction.
4.  Homelessness rose for the fourth straight year in 2020.
5.  A new report (The State of the Nation's Housing 2021) paints a troubling portrait of racial and generational gaps in homebuying — and a severe lack of housing where it’s needed most.
6. 2021 has broken records when it comes to home prices, with median housing prices rising 23.6% in May compared to the same period last year, reaching a record high of $350,000.

On the subject of home prices: The S&P CoreLogic Case-Shiller 20-city home price index, released June 27, jumped nearly 15% in April from the previous year. That is up from a 13.4% annual gain in March. The index measures the value of residential real estate in 20 major U.S. metropolitan areas: Atlanta, Boston, Charlotte, Chicago, Cleveland, Dallas, Denver, Detroit, Las Vegas, Los Angeles, Miami, Minneapolis, New York, Phoenix, Portland, San Diego, San Francisco, Seattle, Tampa and Washington, D.C. All 20 cities that make up the index reported higher year-over-year price gains in April than the previous month. Five cities — Charlotte, Cleveland, Dallas, Denver and Seattle — had the largest 12-month price increases on records dating back 30 years.

Is there a point where these historic high prices start working against home sellers? It's being stated that it's harder than ever to buy a house. Bidding wars taking prices above list prices seems great for a seller, unless failed appraisal issues arise (see more in this post and this post). Buyers have gone wild in some scenarios — offering a Caribbean vacation with their offer, or even offering a million over the asking price! It is pushing many buyers to the rental market.

The market does not look to cool down soon and it is not just a U.S. phenomenon. In fact, maybe the world's most unaffordable housing market is Hong Kong. It's actually kept this ranking over the past 11 years. While rental prices in HK have come down, home prices have gone up. This report from the Urban Reform Institute and the Frontier Centre for Public Policy lists the other most unaffordable across the world: Vancouver, Sydney, Auckland, Toronto, Melbourne, San Jose, San Francisco, Honolulu and London.