US Home Prices Hit a Record High, But Americans Keep Buying
A recent measure, homes in America have reached their highest prices on record.
In May, the median price of pre-owned homes in the US continued its upward trend for the eleventh consecutive month, rising 5.8% from a year earlier to $419,300, as reported by the National Association of Realtors on Friday. This marks the highest price ever recorded by NAR.
According to CNN, the situation could improve somewhat later this year, when the Federal Reserve is expected to begin paring back interest rates from a 23-year high, which should bring down mortgage rates. But Fed officials have penciled in just one rate cut for this year, and the days of ultra-low interest rates are long gone. Economists don’t expect the average mortgage rate to fall below 6% in 2024.
Recent research from Zillow shows that in order for a median-income household to afford a monthly mortgage payment on the typical US home, it would need to save up more than $127,000 for a down payment. That’s roughly double the median salary of a US worker.
Potential homebuyers are indeed facing a tough market, but that doesn’t seem to be deterring some: Sales of previously owned homes in the US are up from the decades lows in the fall and only edged lower by 0.7% in May to a seasonally adjusted annual rate of 4.11 million.
