The average price of a home soared a record 21% in April, report finds

• Redfin found that the average home price soared a record 21% in April to a new high of $348,500.
• It also found the average home sold for 1.4% more than the asking price in the same time period.
• Experts said this price increase could be due to lumber shortages amidst high demand for houses.

As demand for houses as far exceeded housing inventory during the pandemic, the average price of a home soared a record 21% in April compared to the same time last year, according to a Friday report from Redfin, a real estate brokerage. It also found that houses spent an average of 19 days on the market - down 16 days from last year - with the average home selling for 1.4% more than asking price in the same time period.

"Right now we are seeing a substantial increase in home prices, which could be a precursor to more widespread inflation throughout the economy," Redfin's chief economist, Daryl Fairweather, said in the report.

"These price increases will likely be short-lived, but could cut into homebuyers' budgets and ease competition enough for the housing market to become more balanced. A more balanced market could encourage more move-up homeowners to finally sell, because they won't be so fearful about being able to find and compete for a home to buy," she added.

The surge in people wanting to buy homes during the pandemic was boosted by mortgage rates being at record lows and no need to commute to work. This housing inventory crisis has brought the average home price to a new record high of $348,500.

Fairweather noted that surging lumber prices have driven up the price of new homes, which indirectly drives up the price of existing homes. Insider reported on March 26 that because lumber prices are so high, home builders have been building fewer homes and intentionally raising prices to keep up with the high demand for houses amidst the low supply of lumber.

And Insider's Hillary Hoffower reported on April 30 that the pandemic and the lumber shortage combined are putting homeownership out of reach for many, but especially the millennials entering their prime homebuying years. Fairweather told Insider the housing shortage is leaving millennials "boxed out of the housing market."

Redfin's March findings were also a record-high, with the average home sale price at $331, 590, and this increasing trend in home prices are concerning experts like Fairweather.

"When the pandemic is over, purchasing a home is going to cost much more than ever before, putting homeownership much further out of reach for many Americans," Fairweather said in a statement. "That means a future in which most Americans will not have the opportunity to build wealth through home equity, which will worsen inequality in our society."