PROVIDENCE, R.I. (AP) — Housing prices in Rhode Island are up compared to a year ago driven by shortages in supply and construction materials.
The median price of a single family home was around $349,000 in April, up 18% from a year ago, the Providence Journal reported on Wednesday. For multifamily homes, the media price in April was $355,000, up 24% from last year.
Demand for housing was coming from people looking to relocate during the pandemic but it is continuing now even as public health restrictions are quickly being lifted, Rhode Island Association of Realtors President Leann D’Ettore told the newspaper.
“The buyers that are out there now are still the ones that are saying that they have been empowered to work from home now permanently,” she said. “They’re still motivated by upsizing because of their time that they’ll spend more at home.”
Building materials like lumber are also in short supply, which slows new housing construction, she said.
ADVERTISEMENTThe result of the rising prices is that home buyers are stretching their finances, which can make them more vulnerable to displacement over time.
“If they have trouble, difficulty later down the line — a lost job or an illness — then it puts them at much higher risk of being unable to keep that house,” said Brenda Clement, director of the affordable housing organization HousingWorks RI at Roger Williams University.
If home closings continue at the same rate as last month, the Rhode Island Association of Realtors says, inventory will fall “far below the five- to six-month supply which typically signifies a market balanced between supply and demand.”