Housing Boom: Sales of Million-Dollar Homes Double
The housing market is on a tear, setting all kinds of records, including prices. But it's also a reflection of the uneven economic recovery and more first-time homebuyers are getting priced out.
TONYA MOSLEY, HOST:
The pandemic is driving a record-setting boom in the housing market, according to new numbers just out today. And as NPR's Chris Arnold reports, it's also exposing the ever-growing gulf between the haves and the have-nots in America.
CHRIS ARNOLD, BYLINE: Overall, about 20% more homes were sold in September compared to a year ago. But the most dramatic increases are happening at the top end of the market. Sales of homes costing a million dollars and up have more than doubled since last year.
LAWRENCE YUN: I don't ever recall home sales doubling in a 12-month time span - very unusual.
ARNOLD: That's Lawrence Yun, the chief economist of the National Association of Realtors. He says people are working from home while juggling their kids' remote schooling, and many who can afford to are buying bigger houses. Mortgage companies are making money hand over fist right now. They're doing so many more home loans. Some are running ads like this.
(SOUNDBITE OF ARCHIVED RECORDING)
UNIDENTIFIED PERSON: And although together is great, together with more space is better.
ARNOLD: It's not just the superrich buying bigger places. A home selling between 250- and $500,000 - those saw a 36% jump in sales. Meanwhile, the median home price has also just hit a new record at $312,000.
YUN: Now, it is great news for homeowners, as they are seeing equity rise and rise.
ARNOLD: But Yun says prices are rising too fast. Economists like to see home prices climb in line with people's wages. But home prices, he says, are way beyond that.
YUN: It will eventually lead to a talking point where first-time buyers simply cannot show up to the market.
ARNOLD: Because they can't afford to buy any house they'd actually want to live in. And he's worried that that will lead to even greater income inequality.
YUN: A divergence in society where you have the haves with homeownership gaining their equity or those people who would like to become homeowners continually being frustrated.
ARNOLD: Yun says already there are fewer first-time home buyers. As far as what's driving up prices, it's low interest rates, and there also just aren't enough homes for sale. Construction is ramping up, so that should help eventually. But for now, home buyers are quickly pouncing on the few homes that get put up for sale.
YUN: The days on the market - at 21 days, that is the fastest ever recorded in our monthly series.
ARNOLD: That could be a sign of just how desperate people are during the pandemic to get out of a smaller home and into a bigger one.
Chris Arnold, NPR News.
(SOUNDBITE OF ROBOTAKI'S "MOONSIDE") Transcript provided by NPR, Copyright NPR.