By Joseph Chalfant
Home prices continue to soar across the country despite a dip in mortgage applications.
According to Fox Business, requests for mortgage applications fell by 3.1 percent in the past week, but the price of homes reached records for the fourth straight month.
“Most of the decline in mortgage rates came late last week, with the 30-year fixed-rate mortgage declining to 3.15 percent. This likely impacted refinance applications, which fell 5 percent for both conventional and government loans,” said Joel Kan, a vice president for the Mortgage Bankers Association.
In Nevada, prices are spiking since May of last year, according to a News 3 Las Vegas report. In the last month alone, the average price jumped from $375,000 to $385,000.
“It remains to be seen how much higher these prices can go in the coming months, since we’re reaching a point where more first-time and entry-level buyers are being priced out of the market,” said Las Vegas Realtors president Aldo Martinzes.
According to KUTV, Utah home prices are climbing even faster. Average home prices are now up 30% to $102,000 over last year with no signs of slowing.
“Prices have yet to start moderating. We’re hitting new records,” said Dejan Eskic, a senior research fellow with the Kem C. Gardner Policy Institute.
Big business might be a contributing factor to rising prices. In April, the Wall Street Journal reported that large investors have been targeting entire neighborhoods of single-family residences to increase profits. For example, in Houston, investors acquired 24% of the homes sold recently in the city, with similar trends occurring in growing cities around the country.
“You now have permanent capital competing with a young couple trying to buy a house… That’s going to make U.S. housing permanently more expensive,” said real estate consultant John Burns.
Inflating costs are leaving many wondering if there is a looming house crash. Forbes found that Google searches for “housing crash” have steadily increased since the beginning of the COVID-19 pandemic and now have reached an all-time high.