The U.S. single-family housing market is a seller’s market currently, with prices in May 2021 up 15 percent year-over-year versus May 2021, based on the Amherst Home Price Index.
Similarly, year-over-year single-family rent growth is running close to 8 percent, with several regions outperforming the national average according to Amherst’s Rent Growth Index. Soaring home prices and rents have raised the question of whether the United States is in a housing bubble and due for a correction.
Some factors contributing to the acceleration of demand for single-family homes (such as the pandemic) may go away, but even if supply increases and demand stabilizes tomorrow, it may take one to two years to normalize inventory to 2018-2019 levels. Amherst expects the effects of these supply-demand imbalances will persist and only gradually reverse over time. It may be several quarters before there are more normal rates of growth in home prices and rents.
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