Median home prices rose by 7% from the previous year while principal and interest payments for the existing median-priced home rose by almost 80% in the past few years. Kushi said that this has caused a lock-in effect that has constrained supply and worsened affordability.
“Even if you could afford to buy, you can’t buy what’s not for sale, and there’s just not that many homes for sale in today’s market,” said Kushi.
“We went into 2023 with the expectation that the housing market was going to crumble, and I would say on the existing-home side, it largely did,” said Ali Wolf, Zonda’s chief economist, adding that housing did avoid the 20% or 30% decrease in home prices that many expected.
Devyn Bachman, John Burns Research and Consulting’s senior vice president of research, said that new-home sales accounted for almost 14% of all home sales nationwide which outperformed most expectations. However, the existing-home market is still frozen.
Wolf said that it was possible that the gap between the new-home and existing-home market may carry on in 2024 and she expected the new-home market to continue surpassing the latter even if it may not be considered a blockbuster year.
