National Association of Home Builders CEO Jim Tobin talks about Vice President Kamala Harris' push for tax incentives for homebuilding on “Maria Bartiromo's Wall Street.”
Home prices hit new record in June Housing shortageThis is despite the fact that soaring mortgage rates continue to put homebuying out of reach for millions of Americans.
The S&P CoreLogic Case-Shiller index showed Tuesday that national inflation rose 5.4% year-over-year in June, down from 5.9% the previous month.
On a monthly basis, prices rose 0.2%, according to the index.
“Upward pressures on home prices are making the housing market more unaffordable than it's ever been,” said Lisa Sturtevant, chief economist at Bright MLS. “First-time homebuyers and middle-income earners, in particular, are being left behind in the housing market.”
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The composite index for 10 cities, including Los Angeles, Miami and New York, rose 7.4% from a year earlier, up from a 7.8% increase in May.
A sign hangs outside a home for sale, Wednesday, Sept. 6, 2023, in Atlanta, Georgia. (Photographer: Elijah Nouvellege/Bloomberg via Getty Images/Getty Images)
Composite home prices in the 20 cities tracked, which also include Dallas and Seattle, rose 6.5% from a year ago, down from 6.9% the previous month.
Prices increased in all 20 major metropolitan markets tracked by the index, with New York seeing the highest price growth, up 9% from a year ago, followed by San Diego and Las Vegas, with increases of 8.7% and 8.5%, respectively.
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In Portland, Oregon, home prices were up just 0.8% in June from a year ago, again the slowest rate of increase.
The Case-Shiller Index is released with a two-month lag, so it may not reflect the latest market trends.
“Mortgage rates have been falling since June, but there is evidence that even lower rates are not enough to lure homebuyers back into the market,” Sturtevant said. “Some buyers are waiting for home prices to fall, not just interest rates.”
There are a variety of driving forces behind the rise in house prices.
Showing homes available for sale in Austin, TX on May 22, 2024. (Brandon Bell/Getty Images/Getty Images)
The country's housing shortage has been exacerbated by years of housing shortages, and then Mortgage interest rates soar and expensive construction materials.
Rising mortgage rates over the past three years have also created a “golden handcuff” effect on the housing market.
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Sellers who signed record-low mortgages at sub-3% interest rates at the start of the pandemic are reluctant to sell, further restricting supply and leaving few options for buyers eager to purchase.
Economists predict mortgage rates will remain high into 2024 before starting to fall. The Federal Reserve begins cutting interest ratesStill, interest rates are unlikely to return to the lowest levels seen during the pandemic.
