In April, home prices reached new record highs, according to a report from the National Association of Realtors. The median price of an existing home climbed 5.7% year-over-year to $407,600, putting pressure on prospective homeowners already struggling with high interest rates. This marks the tenth month in a row of year-over-year increases and the highest ever recorded for the month of April.
Despite relatively flat total existing home sales in April (4.14 million), home prices rose due to more supply entering the market, particularly in the upper-end market. The NAR’s chief economist Lawrence Yun noted that home affordability has plummeted since the pandemic, with soaring mortgage rates and high property prices driven by nationwide supply shortages. These trends have made renting more affordable than buying in most major cities, with landlords emerging as major winners.
If you’re hoping for a drop in interest rates soon, you may need to keep waiting. Federal Reserve governor Christopher Waller recently stated that the government will need to see “several months” more of signs that inflation is cooling before lowering rates. However, inflation indicators and consumer prices have remained high, making it unclear when rates will decrease.
