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CBS Minnesota
The median U.S. home sale price — what buyers actually paid for a property — also hit a record in April, reaching $383,725.
"We are in a situation where many homeowners are locked in at that low interest rate 3%,4% and don't want to give that up," said Lawerence Yun, Chief Economist with the National Association of REALTORS®. "So the number of new listings coming onto the market is few while at the same time, homebuilders are trying to fill the gap by building more."
Yun says the problem with the current market is simple economics: Demand has continued to grow while supply continues to dwindle, pushing prices up. "(Existing) homeowners have been the big beneficiary of the current housing market dynamics, but it's been very frustrating for homebuyers, especially the first-time homebuyers where affordability simply appears to be getting out of hand," he said. "The Federal Reserve is not helping. They are delaying the rate cut and consequently, the affordability, the monthly payment to purchase a typical home is rising and it's a very difficult circumstance for first-time buyers."
Yun says a market crash is unlikely considering the strong demand and lack of recession. He believes government programs or policy changes could allow for more stabilization.
"Removing some of the regulatory barriers for homebuilders to build more homes, maybe rezoning so that we can produce more densely housing units in a same location," he said. "(Maybe) even some tax policy changes, things like...can we provide some tax credit incentive for real estate investors, Mom and Pop real estate investors who may have four or five properties. Are they willing to let one of those properties onto the market?"