The dream of owning a home is getting harder and harder as access to affordable homes is decreasing in a seller’s market that has made homebuyers write love letters and make cash offers to sweeten the deal.
In the past two years, the housing market has been increasingly inviting to both buyers and sellers. Low-interest rates have persuaded homebuyers to enter the market. The current average mortgage interest rate was 2.98 percent, according to Freddie Mac. Yet lower interest rates have also made the cost of houses rise.
Homes costing less than $200,00 — even in rural areas — declined to 20 percent of all real estate transactions in September 2021, according to an analysis by John Burns Real Estate Consulting.
“They’re like unicorns,” Rick Palacios Jr., director of research at John Burns Real Estate Consulting, told Money.com.
The reason that home prices are rising is not just a result of low-interest rates. Experts note that buyers are looking for larger homes and in some cases, second properties, in response to working from home.
If homebuyers want a home for less than $200,000, they will need to look in areas such as Detroit, Memphis, or Toledo, Ohio. The average home price in Memphis was $140,000, while Toledo, Ohio was $100,000, according to Zilliow.com. Detroit’s home sales average at $67,000.
Home Rates In Cities With Large Black Populations
In other cities with large Black populations, housing prices are soaring. Bedford-Stuyvesant, a section of Brooklyn, New York, with a high Black population, boasts homes costing over $1 million. Just over the bridge in Teaneck, New Jersey, houses are averaging $450,000. While homes in Bed-Stuy are well above the national average, it is also an indication that the desire for higher-end homes is increasing in demand.
Yet Teaneck’s home sales are more aligned with national averages. Home sales between $350,000 to $550,000 made up an estimated 27 percent of sales in September 2021 — up 7 percent from just two years ago. In Atlanta, for instance, the average home is $350,000, according to Zillow.com.
Homes costing between $200,000 to $350,000 make up an estimated 34 percent of sales, a decrease of 6 percent from 2019. Areas such as Charlotte and Chicago have homes selling within this range. For example, homes in Charlotte are currently costing an estimated $330,000. And Chicago’s real estate market is right behind, with the average home selling for $310,000.