US home prices hit record high as sales and inventory slip

A $440,600 median existing home now carries about a $2,226 monthly principal-and-interest payment if a buyer puts 20% down and locks in Freddie Mac’s 6.49% 30-year rate; with 5% down, that payment rises to about $2,643 before taxes and insurance. In June, existing-home sales fell 2.4% from May to a seasonally adjusted annual rate of 4.09 million and unsold inventory slipped 0.6% to 1.56 million homes, equal to 4.6 months of supply.

The median existing-home sales price rose 1.8% from a year earlier to $440,600, an all-time high in data going back to 1999, extending a run of 36 straight months of year-over-year gains. First-time buyers made up 33% of purchases in June, down from 35% in May and still below their long-run share of roughly 40%.

Lawrence Yun, NAR’s chief economist, blamed high mortgage rates and too few homes for sale for the squeeze and warned the market’s progress on affordability could stall if inventory growth keeps slowing. Federal Housing Finance Agency research put mortgage-rate lock-in at a 57% cut in fixed-rate home sales in 2023’s fourth quarter and 1.33 million prevented sales between the second quarter of 2022 and the fourth quarter of 2023, while Federal Reserve research put lock-in at 44% of the drop in mortgage borrower mobility from 2021 to 2022.

Harvard’s Joint Center for Housing Studies says persistent affordability challenges and rising economic uncertainty are hurting housing conditions nationwide, with existing-home sales at three-decade lows, inventories rising and rents declining. In Houston last November, Yun projected existing-home sales would rise about 14% this year and home prices about 4%, but by early July Freddie Mac still had the 30-year mortgage rate at 6.49%.