During June, prices for the most affordable third of homes sold in the U.S. increased 8.7 percent, according to a report from Redfin.
The report found prices for the most expensive third of homes sold during June increased 1.1 percent year-over-year.
“Now that the economic expansion is in its 10th year, some working- and middle-class Americans are finally starting to see wage increases significant enough to ready them buy their first homes,” Redfin Chief Economist Daryl Fairweather said in a release. “But economic growth is a double-edged sword for the housing market.
“The increase in demand for low- and moderately priced starter homes is pushing up prices for the most affordable segment of the market,” Fairweather said. “Over the next few years, prices for the most affordable homes are likely to continue growing rapidly, pushing homeownership further out of reach for people with lower incomes.”
According to the report, the supply of homes for the most affordable tier was down 14.5 percent year-over-year in June. For the most expensive tier of homes, supply was up by 9.7 percent from one year ago.
Prices for the most affordable homes in June only fell in San Jose and Orange County, California; and in Memphis, Tenn. Redfin said the supply for the most affordable homes in June was up 94.1 percent in San Jose and 24.5 percent in Orange County.