Existing Home Prices Hit Record $402,000—But Sales Fall As Housing Market 'Painfully' Adjusts To Rising Rates
ForbesJun 21, 2022
The median sale price for an existing (previously occupied) home in the US rose to $407,600 in May - an all-time high that is nearly 15% over last year's figure - according to the National Association of Realtors.
At the same time, however, existing home sales fell 3.4% from April - a decline of 8.6% from May 2021 - marking a two-year low in the otherwise hot sector.
Home sales have now returned to the more sustainable - and rational - levels of 2019, before the pandemic-induced spending spree set in. This is good news: although high mortgage rates will be a challenge for some buyers, they will also slacken demand and help to bring prices back to reality.
Higher mortgage rates may be necessary to cool off inflationary pressures, but they're making homes even more unaffordable for the vast majority of Americans. Homes that were affordable for middle-class Americans with a monthly budget of $2,500 are now well out of reach given the recent rate hikes and their impact on mortgage rates.
There's a 50% chance that the S&P CoreLogic Case-Shiller 20-City Composite Home Price NSA Index will be at least 295 for January 2025, according to the Metaculus prediction community.