In spite of the fact that home sales fell for the fifth consecutive month in June due to a lack of affordability, home prices reached a new all-time high. According to a National Association of Realtors study, the median home price was $416,000 last month, an increase of 13.4% over the previous year. It represents a stretch of monthly price increases of more than ten years.
Existing house sales, which include single-family homes, townhomes, condominiums, and co-ops, decreased in June by 5.4 percent from May and by 14.2 percent from the same month a year earlier. Since June 2020, when sales were artificially depressed by the pandemic, June experienced the worst performance.
According to Lawrence Yun, chief economist at NAR, "falling housing affordability continues to take a toll on potential homebuyers." "Home prices and mortgage rates have both increased too quickly in a short period of time." Homes priced correctly are selling very quickly, whereas homes priced excessively are scaring away potential buyers. Housing shortages persist despite a slight increase in inventory, according to Yun. Builders may be betting that more people will be priced out of renting and buying by reducing the construction of single-family homes while increasing the construction of multifamily structures.
According to Daniel Silver, an economist at JP Morgan in New York, while high interest rates are stifling sales, there may also be other factors at play, such as a lack of accessible stocks and high housing prices.
