Home Prices Saw a 14.6% Annual Gain in April

That's the highest gain on record in over 30 years.

Check out real estate listings in pretty much any market across the country, and you'll probably notice that home prices are much higher these days than they'd normally be.

For sellers, today's red-hot housing market offers a key opportunity to score a large profit. For buyers, it means having to pay more for a home and take on a larger mortgage.

Meanwhile, new data reveals just how substantially home prices have risen. In April, home prices saw a 14.6% annual gain, according to the S&P CoreLogic Case-Shiller National Home Price Index. That's an increase from March's 13.3% gain. April's gain is also the highest reading the index has recorded in more than 30 years.

While home prices rose on a national level, Phoenix, San Diego, and Seattle reported the highest annual gains. All three cities were up more than 20% from the year before.

Should you buy or sell in today's market?

Buying a home in today's market may prove very challenging. Though the inventory of available homes for sale increased slightly in May compared to April, it was still 21% lower than the levels recorded in May of 2020, according to the National Association of Realtors.

Low inventory has contributed to inflated home prices, and so as a buyer, you may find that neighborhoods and properties that would normally be affordable are now, in fact, out of your price range.

You may also find that any home you bid on gets several, if not dozens of, competing offers that are well above the asking price. Bidding wars have been popping up all over the real estate market, and while they're great for sellers, they make things difficult for buyers.

It's for this reason that it could pay to put your home search on pause for the time being and wait until more housing inventory hits the market. Once that happens, the demand for available homes should ease, and prices should start to come down, at least to some degree.

Now, if you're a seller, you do indeed have a prime opportunity to make a killing in today's market. But before you rush out to list your home, you'll need to answer one important question: Where will you go once your home is sold?

One problem some sellers are facing is that while they stand to profit by listing their homes, they can't afford to buy a replacement home. And if that's the boat you're in, it may not be a good time to sell your home because what you gain by unloading your current house, you might fork over in a higher purchase price for a replacement home.

Will home prices start to come down?

If housing inventory continues to increase incrementally over the next few months, then home value could start to creep downward. But there's a good chance home prices will remain inflated for much of the year, and that's something to be aware of, whether you're looking to buy a home, sell a home, or do both at the same time.