The National Association of Realtors reported that home prices surged to record highs in April, reaching a median price of $407,600. This increase marks the tenth consecutive month of year-over-year price growth, putting pressure on prospective buyers who are already facing high interest rates. Despite a relatively flat total number of existing home sales in April, prices continued to rise.
According to Lawrence Yun, the NAR’s chief economist, the upper-end market is experiencing significant gains due to an increase in supply. However, overall home affordability has declined since the pandemic, with soaring mortgage rates and high property prices driven by supply shortages.
These trends have made renting more affordable than buying in most major cities, benefiting landlords. The Federal Reserve governor, Christopher Waller, suggested that interest rates will not be lowered until signs of cooling inflation have been observed for several more months. Despite the Fed’s efforts to combat inflation with increased interest rates, indicators and consumer prices remain high.