Housing prices in the US soared 23.6% in May due to lack of supply, low mortgage rates and economic recovery, the highest level in more than 20 years since statistics were compiled. During the same period, Dutch housing prices rose 12.9 percent. And European countries are also suffering from an unusual surge in prices due to an imbalance in supply and demand.
According to the Wall Street Journal (WSJ) and the Financial Times (FT) on the 22nd, the U.S. NAR announced that the median price of existing homes traded in May reached $35,000,300. It is up 23.6% from the same period last year. The rate of increase in housing prices in May is the highest in 22 years since the start of compiling related statistics in 1999, and it is also the first time that the median price has exceeded $350,000. As housing prices soared due to a shortage of supply, the number of homes sold in May fell 0.9 percent from the previous month to 5.8 million, continuing to decline for the fourth consecutive month.
Crazy housing prices in US: classic problem of supply and demand
The biggest cause of “crazy house prices” is a lack of supply. Earlier, NAR said that between 2001 and 2020, only 1.225 million new homes were supplied by U.S. construction companies annually, a total of 5.5 million homes were lacking. With abundant liquidity, housing sales are being sold as soon as they are on the market.
Europe is also experiencing an unprecedented surge in house prices. The Dutch National Statistical Office said in May that existing housing prices rose 12.9% compared to the same period last year, marking the highest increase in 20 years since 2001. Housing transactions fell 12.1 percent to 16,126 during the same period. The European Central Bank (ECB) also said in a report released this week that housing prices in the eurozone (19 countries using the euro) rose 5.8 percent in the fourth quarter of last year from the same period last year, the highest in more than 13 years since 2007.
