Home prices, already through the roof, are expected to keep climbing.
A national housing shortage is showing no signs of easing and the cycle is not expected to break anytime soon.
"We expect a persistent imbalance between supply and demand in the housing market to generate double-digit home price appreciation this year and next," wrote Ronnie Walker, economist at Goldman Sachs.
The median existing-home price in April was up 19% from last year to $341,600, according to the National Association of Realtors. The price surge came as city dwellers fled to regional hubs and the more socially-distant suburbs after being given the opportunity to work from home indefinitely amid the COVID-19 pandemic.
The flight to the suburbs pushed total housing inventory down 21% from a year ago to 1.16 million units, according to NAR. Unsold inventory was 2.4 months, holding near a record low.
Existing-home sales account for more than 90% of total home sales.
"Existing homeowners continue to stay in their homes because they have to find something to buy as well, which is very difficult with such a limited supply market," said Odeta Kushi, deputy chief economist at First American Financial Corp.
Americans looking to build a new home are also confronted with difficulties.
"Build times have elongated a bit with supply chain disruptions and some of the labor availability," said Bill Wheat, chief financial officer at D.R. Horton Inc.
Lumber prices have soared by as much as 316% since the start of 2020 as the pandemic resulted in supply chain bottlenecks and strong demand for building projects, both new construction and home improvements.
The surge in lumber prices added $36,000 to the cost of building an average-sized home. And that’s if you can find someone to build it. The industry is also dealing with a shortage of workers and, in some areas, a lack of adequate land to build on.
America has been "underbuilding for a decade, and so that points to a continuation of the supply-demand imbalance, which points to further house price appreciation," Kushi said.