Realtors: Home Prices Are at Unhealthy Levels

Realtors: Home Prices Are at Unhealthy Levels

If you’re thinking about buying a home, but concerned home prices have risen just a little too much lately, take heed of this warning.

In the latest pending home sales release from the National Association of Realtors, chief economist Lawrence Yun noted that a supply/demand imbalance “has pushed home prices to unhealthy levels.”

The issue is that there aren’t enough homes for sale, which I touched on last week. This has caused home prices to surge because of very limited supply and fairly healthy demand.

So while it’s seemingly great news that homes are selling quickly and often for more than the original listing price, it also means some buyers might be getting in over their heads.

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Yun added that home prices are now at levels “nearly four or more times above the pace of wage growth” in some areas of the nation, which could lead to a serious affordability crisis in the near future.

His solution, as always, is more inventory, both new and existing homes, which would correct the imbalance and lead to more realistic asking prices and fewer bidding wars.