Widespread shortages on building materials continue to prompt home builders to raise their prices. Material prices have increased by 26% over the past year for building the same house, according to National Association of Home Builders data. That’s put pressure on new-home prices: In May, the median price of a newly built home was 18% higher than a year ago, at $374,400.

Material shortages have increased for appliances, paint, lumber, and more.

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To help offset these higher prices, builders are raising their prices and pre-ordering items, according to the latest monthly survey of the NAHB/Wells Fargo Housing Market Index.

Forty-five percent of builders surveyed are also adding in price escalation clauses to protect themselves from rising prices during the process but passing those higher costs on to buyers.

Also, 39% of builders say they are waiting until late in the construction process to list a spec home in case prices increase more.

Some of the highest increases in material costs have been in lumber. Some builders have even changed their building methods as a result. Some builders are switching from traditional wood framing to other materials. Seventeen percent of builders said they were considering switching to steel, 16% to structural insulated panels, 14% to insulated concrete forms, and 8% to concrete masonry.

However, lumber prices have started to fall, now dropping for eight consecutive weeks. Lumber prices are now down more than 50% from their peak in early May.

According to a Trip Advisor survey from this spring, more than two-thirds of Americans said they plan to travel during this summer. Investors are discovering greater interest in their short-term vacation rentals, and business is booming.

Occupancy rates surged 21% in May compared to pre-pandemic levels from May 2019, according to AirDNA, a real estate company that collects data on Airbnb and Vrbo short-term rentals. Prices to rent vacation properties have increased by about 8.3% over the past year.

“There’s a very big opportunity to buy cheap and make a lot of money in return,” Luis D. Ortiz, a real estate broker who also stars on Netflix’s “World’s Most Amazing Vacation Rentals,” told realtor.com®. “Vacation rentals give you something that hotels can’t give, and it’s that sense of home.”

Realtor.com®’s research team identified the hot spots with the most profitable real estate markets for those wanting to purchase a property list on short-term rental sites like Airbnb or Vrbo. They found that smaller resort towns in remote locations that offer a big connection to the outdoors are surging in demand. Many are also within driving distance to larger cities.

Here are the top seven areas showing some of the most profits in short-term rentals, according to realtor.com®’s findings:

1. Joshua Tree, Calif.

• Median list price: $525,050
• Annual change in revenue generated: 113%
• Average daily rate: $268

2. Sea Isle City, N.J.

• Median list price: $1.2 million
• Annual change in revenue generated: 82%
• Average daily rate: $432

3. Lincoln City, Ore.

• Median list price: $764,950
• Annual change in revenue generated: 72%
• Average daily rate: $250

4. Sedona, Ariz.

• Median list price: $895,050
• Annual change in revenue generated: 65%
• Average daily rate: $264

5. Blue Ridge, Ga.

• Median list price: $599,950
• Annual change in revenue generated: 60%
• Average daily rate: $275

6. Leavenworth, Wash.

• Median list price: $799,050
• Annual change in revenue generated: 56%
• Average daily rate: $310

7. St. George, Utah

• Median list price: $635,050
• Annual change in revenue generated: 56%
• Average daily rate: $169

View the full list at realtor.com®.

Home buyers had another chance to snag lower rates this week. The 30-year fixed-rate mortgage averaged 2.98%, Freddie Mac reports.

“Economic growth remains steady and is bolstering more segments of the economy,” says Sam Khater, Freddie Mac’s chief economist. “Although low and stable mortgage rates have kept the housing market booming over recent months, a deterioration in affordability and for-sale inventory has led to a market slowdown.”

Freddie Mac reports the following national averages with mortgage rates for the week ending July 1:

• 30-year fixed-rate mortgages: averaged 2.98%, with an average 0.6 point, dropping from last week’s 3.02% average. Last year at this time, 30-year rates averaged 3.07%.
• 15-year fixed-rate mortgages: averaged 2.26%, with an average 0.7 point, falling from last week’s 2.34% average. A year ago, 15-year rates averaged 2.56%.
• 5-year hybrid adjustable-rate mortgages: averaged 2.54%, with an average 0.3 point, rising slightly from last week’s 2.53% average. A year ago, 5-year ARMs averaged 3%.

Freddie Mac reports commitment rates along with average points to better reflect the total upfront costs of the mortgage.

As home listing prices break another new record, more homeowners are looking to take advantage and list their homes for sale. New listings in June rose 5.5% year-over-year and are up 10.9% over the prior month, according to a new report from realtor.com®.

The uptick in new listings may give buyers more homes to choose from and could offer a hopeful sign for the real estate market.

Still, the inventory challenges in the housing market are far from over: The number of homes for sale still remains 43% lower than last year.

“Although there’s still a significant shortage of homes for sale and home prices just hit a new high, our June data report shows good news on the horizon for buyers,” says George Ratiu, senior economist at realtor.com®. “Inventory declines improved over the steep drops seen earlier in the pandemic as sellers stepped back into the market in a variety of price ranges across the country. The improvement we saw in new listings growth from May to June shows sellers are entering the market historically later in the season, which could mean we’ll see home buying continue into the fall as buyers jump at new opportunities.”

If the progress in new listings continues, Ratiu adds that the housing market could return to a more normal pace of activity by the second half of 2021.

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That could help cool off some of the recent highs in home prices. The median U.S. listing price increased 12.7% over last year to $385,000, which marks the fifth consecutive month for price records, realtor.com® reports. However, the year-over-year price growth is starting to show signs of moderating, down from 15.2% in May.

Despite higher prices, homes continue to sell fast. The typical home spent 37 days on the market in June, which is 21 days faster than the average time on the market pre-pandemic in 2017, 2018, and 2019. Denver and Rochester, N.Y., had the fastest times on the market in June at a median of 12 days, followed by Nashville at 15 days.

Job losses during the COVID-19 pandemic hit the Asian American community particularly hard. Hate crimes also surged against the community, the fastest-growing population in the U.S.

About 60.6% of Asian Americans and Pacific Islanders are homeowners. While that’s a higher percentage than other minority groups, the numbers are lower than the national average of 65.6% in the first quarter of 2021, according to a new report, the 2021 State of Asia America, from the Asian Real Estate Association of America in partnership with RE/MAX and Freddie Mac. For comparison, the white homeownership rate is 73.8%.

“The challenges we face grew substantially throughout the pandemic, including job losses as well as an immense increase in hate crimes and subsequent housing discrimination that are forcing so many to stay in their current communities rather than move to new and unfamiliar places,” said Amy Kong, AREAA’s president.

Kong also stressed the importance of alternative credit needs “as so many in the AAPI community have been culturally adverse to credit, but have good jobs and savings. We also are working hard on overcoming language barriers, especially when it comes to paperwork involved in real estate transactions.”

The challenges in homeownership are occurring despite Asian Americans tending to have higher incomes than the national average—$93,759, which is 35% higher than the national average, the report notes.

Asian Americans tend to live in some of the priciest areas in the U.S. and thus tend to spend more on real estate when compared to national averages. The median home value for Asian Americans was $472,500, compared with the national median home list price of $380,000 in May, according to realtor.com® data.

Only five real estate markets with large Asian American and Pacific Islander populations saw homeownership rates that are higher than the national average: Riverside, Calif. (about 71% of the Asian American population were homeowners); Washington, D.C. (69%); Miami (69%); Houston (69%); and Atlanta (67%).

The report notes the South is becoming increasingly popular among the Asian American population. Georgia led the nation with a 66.9% homeownership rate for the community, the report notes.

Vacation-home sales have surged during the pandemic as remote work and low mortgage rates have made them more desirable.

In 2020, vacation-home sales climbed 16.4%, outpacing the 5.6% growth in existing-home sales, according to the National Association of REALTORS®’ 2021 Vacation Home Counties Report.

NAR identified the hottest counties for vacation homes in 2020 based on sales growth, price growth, change in days on market, and the number of seasonal homes in 2019 to account for the market’s size.