Hot Housing Market Continues To Drive Up Home Prices

The red-hot real estate market cooled a little this summer, but it is still sizzling. The latest numbers from the National Association of Realtors showed pending home sales rose 8.1% in August compared to July.

"We still have a very hot market," says CBS News business analyst Jill Schlesinger. She says that continues to drive home prices up. According to the National Association of Realtors, existing homes prices are up nearly 15% from a year ago and the median price for an existing home is $356,700. "The vast majority of homes are selling in less than a month. And this has really been tough on people who are entering the housing market because the affordability has really changed," Schlesinger says.

California couple Joep Spork and Sarah Van Slagmahe's search for a home came with challenges. There were limited options in their price range and two offers they made were turned down. But after months of looking, the third time was a charm. They bought a small two-bedroom. "We feel like we were very, very lucky that our third offer got accepted because we've heard stories from friends that it took way longer than we did," Van Slagmahe says.

Bruce McNeilage says his company, Kinloch Partners, has a solution for frustrated buyers. The company develops rental communities in Tennessee, giving people who can't afford to buy a home the opportunity to rent a traditional house. "The pandemic has been the best thing for our business, 'cause people aren't buying so they're renting," he says. It may be an attractive model because experts forecast home prices could continue to rise. Mortgage rates have also been on the rise recently.