Following the recession, sales of tbe more expensive homes, those in the $US200,000-$400,000 price range and higher, tumbled. Meanwhile, sales of homes under $US200,000 surged.
More recently, this trend appears to be changing.
The latest US residential and foreclosure sales report from RealtyTrac has found that more expensive home sales represent a growing share of the market.
“When broken down by average price range, U.S. sales are clearly shifting away from the lower end,” Daren Blomquist, vice president at RealtyTrac wrote in a press release.
“Properties selling below $US200,000 represented 50 per cent of all sales in May, but that was down from a 55 per cent share a year ago. Meanwhile, the share of homes selling above $US200,000 increased from a 45 per cent a year ago to a 50 per cent in May 2014.”
Ian Shepherdson at Pantheon Macroeconomics has pointed out that the decline in distressed properties, has skewed national average home prices like those generated by the Case-Shiller index.
“As foreclosed homes typically sell for much less than regular private sales, a decline in the proportion of foreclosure sales will raise reported prices,” he writes. “The correlation between changes in the proportion of foreclosures and the rate of increase of Case-Shiller home prices is not perfect, but it is real.”
Moreover, rising home prices move more people into positive equity and help support the economy.
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