The answer, warns the Federal Reserve Bank of Dallas, is that the property market is showing “signs of a brewing U.S. housing bubble.”
That may be unsettling to millions of potential homebuyers who are coping with myriad financial pressure points. For one, mortgage rates are swiftly rising, reaching an average of 4.67% for a fixed 30-year loan for the week ended March 31 — the highest since 2018, according to Freddie Mac. And the national median listing price for a home has jumped to a record $405,000, Realtor.com said on March 31.
Home buying jumped during the pandemic due to a confluence of trends. For starters, millennials now represent the largest U.S. generation and have moved into their prime home buying years. And the pandemic forced millions of people to work from home, prompting some to move out of cities or look for bigger dwellings to cope with the reality of remote work. The typical listing price for a home has jumped almost 27% in the past two years, Realtor.com said.