Study: Housing Prices Far Outpaced Consumer Inflation in San Diego, Across U.S.

One measure of housing prices in the last five years shows them rising far faster than general inflation over the same period, according to a new analysis of real estate data.

The increase in median price-per-square foot suggests that the typical home on the market today is worth 52.7% more than before the pandemic, more than double the roughly 23% increase in consumer inflation since May 2019, said Danielle Hale, chief economist for Realtor.com.

Median list prices also have risen since then, by 37.5%, and with inventory down 34.2% as compared to the two years that preceded the pandemic, the study suggests that buyers face a seller-friendly market.

Nearly half of the 50 metros included in the Realtor.com report saw an increase in median price-per-square foot of at least 50% since 2019.

San Diego was among them., and like other top metros saw far bigger jumps than the 52.7% for homes nationally.

New York came in at 85%, Boston, at 73% and Nashville, at 68.6%.

The San Diego region was barely behind, at 65.7%, and Riverside and San Bernardino combined were at 62.7%.

“The specifics will vary from market to market, but the data suggest ongoing opportunity for many sellers,” Hale said.

With mortgage rates remaining higher than those many existing homeowners have access to, she explained, the market offers opportunities for sellers who don’t have to replace a mortgage, particularly investors or second homeowners looking for an exit, equity-rich homeowners looking to downsize or those planning a shift to renting.

The all adds up to higher costs for homebuyers and an increase in the average income required to purchase a median priced home.

In May, the typical monthly mortgage payment for a median home grew by roughly $158 compared with a year ago.

As a result, the household income required to purchase the median-priced home rose by $6,400, to $119,700, which also accounts for the cost of tax and insurance.