US prices for property hit a record high in June, rising by 5.2 per cent to a national average price of $276,900.
The latest rise in US prices shown in a report from the National Association of Realtors (NAR) marks the 76th consecutive month of year-on-year property price gains.
Part of the reason for the continuing gains in US prices appears to be a lack of available property on the market, which has led to a fall in real estate sales, mirroring the housing market in New Zealand reported earlier this week.
Existing home sales, which make up about 90 per cent of US home sales, dropped 2.2 percent from a year ago in June. They have declined on a year-over-year basis for four consecutive months and decreased 2.2 percent in the first half of 2018.
A poll of economists by news agency Reuters had predicted a gain of 0.5 per cent for existing property sales in June. However, while sales rose in the Northeast and Midwest, they fell in the West, which has seen a sharp rise in prices, and the South, where most properties are sold.
Rising building materials costs as well as shortages of land and skilled labour have left builders unable to bridge the inventory gap, pushing up property prices across the US.
Despite US prices rising in June and sales volumes declining, properties for sale typically stayed on the market for 26 days, unchanged from the last three months and down from 28 days a year ago.
Fifty-eight per cent of properties sold in June were on the market for less than a month. The share of first-time buyers was unchanged at 31 per cent last month.
Property supply was found to be particularly tight at the lower end of the market, with sales volumes down by 18 per cent year-on-year.
There were 1.95 million existing properties on the market nationally in June, up 0.5 per cent from a year ago. That was the first year-on-year increase since June 2015, but supply remains very tight.
At June’s sales pace, it would take 4.3 months to exhaust the current inventory. Up from 4.1 months in May, but a 6-7-month supply is viewed as a healthy balance between supply and demand.
It seems US prices won’t stop rising, but it is getting harder for overseas property investors to enter the market with a lack of available properties.