US Home Prices Hit Another Record High

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Findings from Redfin show the median U.S. home sale price soared to $397,954 in June – a nearly 5% increase from a year earlier. That marks the highest level on record and the biggest annual increase since March.

The monthly mortgage payment at that price, when accounting for the 6.86% median interest rate for a 30-year mortgage, is now $2,749. That is roughly $88 shy of April’s record, thanks to a slight drop in mortgage rates.

“High mortgage rates and record-setting home prices have made affordability the biggest challenge in the housing market in 2024,” said Lisa Sturtevant, Bright MLS chief economist. “Even as more inventory comes onto the market, more buyers are being priced out in markets across the U.S. Some buyers are going to wait for rates to come down in the second half of the year which means that it could be a relatively slow summer for home sales.”

There are a number of driving forces behind the affordability crisis.

Years of underbuilding fueled a shortage of homes in the country, a problem that was later exacerbated by the rapid rise in mortgage rates and expensive construction materials.

Higher mortgage rates over the past three years have also created a “golden handcuff” effect in the housing market. Sellers who locked in a record-low mortgage rate of 3% or less during the pandemic began have been reluctant to sell, limiting supply further and leaving few options for eager would-be buyers.

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