DEAL OR NO DEAL? Home Prices Hit ALL-TIME High

July 23, 2022
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Valuetainment Media
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The median home price was $416,000 last month, up 13.4% from one year ago

This marks more than a decade of year-over-year monthly price gains, according to a report from the National Association of Realtors.

Home prices hit a new all-time high in June.

Home sales declined for the 5th month in a row, as a lack of affordability continues to push buyers away.

The median home price was $416,000 last month, up 13.4% from one year ago, according to a report from the National Association of Realtors.

This marks more than a decade of year-over-year monthly price gains.

June marked its weakest sales figures since 2020.

Sales of existing homes, including single-family homes, townhomes, condominiums, and co-ops were down 5.4% in June from May and 14.2% from a year ago.
“Falling housing affordability continues to take a toll on potential homebuyers. Both mortgage rates and home prices have risen too sharply in a short span of time,” says Lawrence Yun, NAR’s chief economist.

Inventory

Inventory saw its first year-over-year turnaround in 3 years.

The number of homes available for sale at the end of June was up 9.6% from May and 2.4% from a year ago.
“Finally, there are more homes on the market,” said Yun. “Homes priced right are selling very quickly, but homes priced too high are deterring prospective buyers.”

Even though sales declined, home prices continued to soar.

Miami had the largest median price growth, up 40.1% from a year ago.

Orlando was the runner-up at 30.6% and Nashville up 30.6%, according to the NAR report.

While the increase in inventory may reduce prices, mortgage rates are climbing which reduces buyers’ purchasing power.

“It remains to be seen which factor will have a bigger impact on home sales,” says Danielle Hale, chief economist for Realtor.com.

“I expect affordability to be the bigger driver than availability moving forward,” said Hale.

More affordable areas in the Northeast and Midwest are some of the hottest housing markets, according to Realtor.com.

NAR’s data supports this trend, with home sales holding steady from May to June in the Northeast and slipping only 1.6% in the
Midwest compared to drops of 6.2% in the South and 11.1% in the West.
“As mortgage rates and prices of other goods and services continue to climb, home shoppers are likely to become even more budget conscious. This is especially true if concerns about the strength of the job market, which has so far remained resilient,” Hale said.

Rapid Home Closings

Even though home sales have slowed to a pace similar to 2019, the number of days a property is on the market before going into contract is the shortest ever, at 14 days.

A year ago it was 17 days and a more typical market would see properties on the market for close to 30 days.
“Whenever homes are listed, they are attracting buyers,” said Yun.
One possible driver of the record-low number of days on the market is that buyers are trying to take advantage of their locked-in interest rate.
“Mortgage rates have been trending higher. Maybe buyers are trying to take advantage of a lower locked-in rate. That period is coming to an end quickly. They want to sign the contract and close the deal quickly,” says Yun.
Sellers should take note that this type of housing market is not likely to last, said Yun. “This could be the last time we see such a swiftness in the market.”

Housing Shortages

While inventory is ticking up, there are still shortages of housing, said Yun.

Builders are cutting back on single-family construction and increasing the construction of multifamily buildings, betting on more people getting priced out of buying and renting instead.
“I don’t foresee any oversupply coming, even as sales retreat,” says Yun.

READ MORE: 7 Impressive Tips For Building Wealth, According to The Bible

 

ABOUT THE WRITER:

Elena Patestas is a journalist and writer for Valuetainment media. She attended Pepperdine University in Malibu, California, and Adelphi University on Long Island, New York. She was born and raised in Roslyn, New York, and currently lives in Miami, Florida.

Elena is passionate about bringing positive change to our world and believes education is the root to solving many societal problems. After overcoming a chronic health condition, Elena became passionate about health and believes food is the key to preventing dis-ease and achieving optimum health.

Amongst her many goals, she hopes to bring positive, impactful change to our world to create a healthy, financially sound, and unified society.

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