Sales of expensive homes have done particularly well over the past year, with the share of existing homes sold for over $500,000 surging from 15% a year ago to a record high 26% in April. An extreme shortage of cheaper homes for sale, coupled with a jump in purchasing power thanks to larger down payments and lower mortgage rates, helps explain that shift. Inventory shortages will continue to drive buyers toward expensive homes, but purchasing power is set to ease. Overall, we expect the share of new and existing homes sold for more than $500,000 to edge back to around 20% to 22% over the next couple of years.
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