According to a newly released report from Standard & Poor’s and Case-Shiller, home prices are still on the upward swing. Year-over-year, home prices in the United States have increased by 10.3%. While some say increased prices are a sign that demand has likewise increased, the fact is that the numbers just don’t support that claim. According to the U.S. Census Bureau, home ownership levels in the United States sit stagnant at 64.8%. That’s the first time rates have been below 65% since 1995, and it’s the lowest home ownership has been for nearly 20 years.
Rising Home Prices, Stagnant Income Levels Keep Sales Flat
The issue for the U.S. housing market is that prices continue to skyrocket while the amount of money Americans have to spend, whether on groceries or homes, is growing at a torturous crawl. According to the U.S. Bureau of Economic Analysis, American workers only saw an increase of 0.5% in personal income levels in April. While the next report, due on May 30, could show that income levels are making a much stronger impact, most industry analysts aren’t holding their breath.
Even so, New Home Starts Are Encouraging
Even with prices effectively leveling out the sale of homes, numbers released by the U.S. Census Bureau for April show that the housing market is in fact making strides toward becoming at least a shadow of its former self. Over a million new homes were started in April, marking a significant shift away from the declines seen in both February and March. However, until the growth of home prices slows or Americans start to see real growth in their paychecks, sales are likely to remain flat for the near future.