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Cost Buying a new home A new report shows it has hit another all-time high.
According to data released by the National Association of Realtors, the median sales price of existing homes in the U.S. jumped to $426,900 in June, up 4.1% from the same time last year, the highest level on record and the second consecutive month that prices have exceeded their all-time high.
As prices rose, existing home sales fell 5.4 percent to 3.89 million for the year.
But in what may be a positive sign for buyers, inventory increased last month: About 1.32 million homes were on the market as of the end of June, up 3.1% from the previous month and 23.4% from the same period a year ago, according to the report.
Mortgage calculator: See how much rising interest rates will cost you
A “Home For Sale” sign in front of a home in Huntington Beach, California. (Allen J. Schaven/Los Angeles Times via Getty Images/Getty Images)
“We’re seeing a gradual shift from a seller’s market to a buyer’s market,” said NAR chief economist Lawrence Yun. “Homes are staying on the market longer, sellers are receiving fewer offers to purchase, more buyers are prioritizing home inspections and appraisals, and inventory is steadily increasing across the country.”
Last month, homes sold in an average of about 22 days, down from 24 in May but up from 18 in June 2023. COVID-19 pandemicTypically, homes would sit on the market for about a month before selling.
At the current sales pace, it would take about 4.1 months for existing home inventory to be depleted, the highest level since May 2020. Experts say a six- to seven-month pace is a healthy rate.
“Although the median home price has hit an all-time high, it is difficult to foresee any significant further increases,” Yoon said. “Supply and demand trends are approaching a balanced market state.”
April 16, 2024, Homes in the Issaquah Highlands neighborhood in Issaquah, Washington. (Photographer: David Ryder/Bloomberg via Getty Images/Getty Images)
Why can’t I find any homes for sale?
There are a variety of driving forces behind the rise in house prices.
Years of under-construction created a nationwide housing shortage, then soaring mortgage rates and rising costs of construction materials made the problem worse.
Rising mortgage rates over the past three years are also creating a “golden handcuff” effect on the housing market: Sellers who locked in record-low mortgage rates of less than 3% at the start of the pandemic are becoming reluctant to sell, further restricting supply and leaving eager would-be buyers with few options.
Economists predict mortgage rates will remain high for most of 2024, then Federal Reserve Still, interest rates are unlikely to return to the lows seen during the pandemic, and investors expect only one or two rate cuts this year.
Homes in Centreville, Maryland on April 4, 2023. (Photographer: Nathan Howard/Bloomberg via Getty Images/Getty Images)
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“Some potential buyers are simply waiting for mortgage rates to come down after the Federal Reserve cuts rates, likely in September,” said Lisa Sturtevant, chief economist at Bright MLS. “With inflation subsiding and the job market remaining strong, a rate cut is all but a given, which means buyers who can wait are waiting.”
A majority of homeowners say they would be nearly twice as willing to sell their home if their mortgage interest rate was 5 percent or higher, according to a Zillow survey. Currently, about 80 percent of mortgage holders have interest rates below 5 percent.
