Home prices have hit a new record this year, and that’s fueled a debate about whether those higher prices are actually a good thing.
Some argue the new high prices are a boon to the economy, but others see it as a drag on affordability.
In a new survey, a group of experts in real estate, finance and accounting from the University of Southern California analyzed what’s fueling the surge in home prices.
The group, known as the Real Estate Board of Greater Los Angeles, is calling for greater transparency and regulation in the way home prices are priced, to help consumers understand what’s driving the surge.
“Home prices have reached unprecedented levels in recent years, driven in large part by rapid increases in supply, demand and inventory,” the report says.
“While supply growth has been strong in recent quarters, we believe that demand is also on the rise, leading to increased home price appreciation.”
The report recommends that state governments consider regulating prices, including the way homeownership is taxed and the cost of financing.
It also recommends that lawmakers consider creating a regulatory framework that would better allow states to gauge and control the pace of home price growth, including by using data and analytics to help local governments better predict and respond to price increases.
The report comes as the U.S. is on track to exceed its all-time high in housing prices in 2021.
Home prices in the Los Angeles region are now $1,000,000 above the historical average, according to the Real Estimate Association.
The survey also found that, across the country, a record number of buyers are buying homes, including more than 1 million new buyers.
About half of the buyers who bought a home in 2017 bought a two-bedroom or three-bedroom home, the report found.
In Los Angeles County, nearly a third of buyers who purchased a home bought two- or three of those same-size homes, the survey found.