The median U.S. home price just passed $400,000 for the first time ever, according to data from the St. Louis Federal Reserve.
In the third quarter the median home price hit $404,700, jumping nearly 20% since third quarter of 2020, when the median sales price was $358,700.
Though it’s an eye-catching number, the market has been hot of late, and a lack of inventory and high demand means foretold the rise in home prices.
According to a recent note from Goldman Sachs, home prices could rise another 16% by the end of next year. Goldman economist Jan Hatzius pointed out that of all the pandemic shortages, the housing shortage might last the longest and that a crash is very unlikely.
Home prices driven up by a housing shortage
The pandemic has seen low mortgage rates, a flight of people from urban areas to the suburbs, as well as younger workers buying their first houses.
According to the latest forecast by Fannie Mae, median home prices are expected to rise another 7.9% between Q4 2021 and Q4 2022.