This Was the Median Home Sale Price Last Quarter

It's not just in your head -- home prices really have been on the rise in a big way.

It's no secret that home prices have been astronomical this year. We can thank a couple of factors for that.

First, low mortgage rates have spurred buyers to clamor for homes. Secondly, seller hesitation has caused a dearth of inventory in the real estate market. When we put those factors together, we get a classic combination of low supply and high demand. Anyone who paid attention in Economics 101 knows what that means -- higher home prices.

During 2021's third quarter, the median sale price of an existing single-family home (meaning, not new construction) rose $50,300 from the prior year to $363,700, reports the National Association of Realtors (NAR). That represents a 16% year-over-year increase. It also explains why so many buyers have been struggling to break into the housing market.

Home prices keep climbing

The median sale price of a single-family home rose last quarter in 99% of the 183 markets the NAR researched. And until more inventory hits the market, things are unlikely to cool off anytime soon.

In October, there was a brief period where mortgage rates seemed to be on the rise. They've since dipped back down in November, and there's a good chance they'll remain competitive well into 2022. As such, we can expect buyer demand to stay strong -- and buyers on a budget to struggle with inflated prices.

Should you hold off on buying a home?

Many people think it's a good time to buy a home since mortgage rates are so low. But while that may be the case, home prices are up so drastically that they're virtually eliminating the benefit of lower mortgage rates.

While housing inventory could increase in 2022, it's hard to say whether that will actually happen. Many would-be sellers are still grappling with economic uncertainty, and so there's a good chance the supply of available homes will remain sluggish well into the coming year, especially if COVID-19 cases begin to surge again.

Furthermore, the winter months tend to be a less popular time for new listings. If real estate inventory does improve in 2022, that likely won't happen until the year's second quarter at the earliest.

If you're interested in buying a home but have struggled in recent months due to sky-high prices, you may want to consider putting your search on pause and picking back up during 2022's second quarter, when there may be more inventory. While mortgage rates could rise between now and then, they're unlikely to rise substantially. And even if they do, they're at such low levels right now that even a 0.5% increase would still make for a competitive rate on a home loan.

Another benefit of waiting to buy a home is that you'll get an opportunity to sock extra money away for a down payment. That could open the door to more buying options if home prices don't budge at all over the next six months -- which is, unfortunately, also a distinct possibility.